1951-12-18

[Stage Direction]
Right Hon. L. S. St. Laurent (Prime
Minister): Mr. Speaker, I had a word with the leader of the opposition (Mr. Drew), the hon. member for Rosetown-Biggar (Mr. Coldwell) and the hon. member for Peace River (Mr. Low) after I heard over the radio this morning the sad news of the death of Mr. A. L. Smith. We all felt that, though it would be a departure from the usual practice of the house, it would be the wish of all hon. members that we ask you to send Mrs. Smith a message of our deep sympathy in her bereavement.
I think there are two principal reasons for such a departure in this case. One is that Mr. Smith was a member of the House of Commons during this very parliament and up to the end of the last session, when he resigned only because the state of his health was such that he felt he could no longer devote to the discharge of his duties the time and close attention that he felt such duties required. And the second, and I think the very compelling reason, is that during the six years of his membership he had, by his great qualities of intellect, of humour and of warm-hearted love of his fellowmen, endeared himself to each and every one of us, and secured in our regard for him a place of high esteem and enduring affection.
I trust, Mr. Speaker, that you also will feel it is proper to make this departure from our usual practice, and convey to Mrs. Smith the expression of our condolences and of our lasting admiration for a dear personal friend, a distinguished citizen, a great lawyer and a great parliamentarian.
Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, I know every hon. member will appreciate the very gracious words with which the Prime Minister (Mr. St. Laurent) has paid tribute to a dear friend of every one of us. I feel, too, that the exception he has made on this occasion, for the reasons he has explained, will meet with the approval of all hon. members.
I know that the death of Mr. Smith is a shock to every one of us, because by his gaiety and wit, combined with his wisdom,
he left upon the minds of members of the house an impression which certainly will not be forgotten during the lifetime of any of us.
I had the privilege of being with him in his home just a little over two weeks ago, and I thought he looked better than he had at any time since he was compelled to leave here last spring, owing to ill health. The occasion of two weeks ago was a typical evening in the Smiths' home. His family were there.
I believe all who knew him well-and that would include members of the House of Commons-realized that it was one of the most closely-knit families one would find.
Every afternoon his son and daughter would drop in and, with that familiarity which expresses respect, in recent years they always addressed their father and mother as Sarah and Art, as indeed all the rest of us did.
I know that those who do not belong to the party to which he belonged will not misunderstand me when I say that, when I saw him last, he was confident that Carl Nickle would be coming down here; and Mr. Smith had promised to be here on the occasion of the swearing in of the new member. We were all looking forward to the reunion, because I think it may be said with confidence that no member of the House of Commons has more completely shared the affection of all members than did Art Smith during the years he served here.
Through his service in the House of Commons he made a great sacrifice, a very great sacrifice indeed, for his own community and for Canada. As the Prime Minister has said, he was an outstanding lawyer. His name is associated with some of the most famous cases in western Canada; and it was only a compelling sense of public duty that persuaded him to offer himself for service in the House of Commons.
I believe it may be said that in some measure his life was probably shortened by the fact that he was compelled to be away from those surroundings which meant so very much to him. He and his wife were fond of music, were fond of fellowship, were fond of simply being with other people and sharing ideas about the daily things that happened and that meant so much to every one of us.
He was known in his early days as Sport Smith. I recall that fact because one of the causes of his great popularity was that in

The late Arthur L. Smith everything he did, whether by way of witty comment or of sharp criticism, he was always a sport in the very best meaning of that word.
Calgary has lost an illustrious son and Canada has lost a truly faithful public servant. I know that all of us would wish to join in the expression of sympathy to his wife and family. We would wish particularly to convey to his wife Sarah the thought that all members of this house who knew him so well are in some measure sharing her sorrow at this time. I think we will all hope that there may be some very real comfort in that knowledge.
Because it is so difficult to realize that this gay and vital personality is gone, it seems natural to close these remarks with the sort of expression we might have used in our ordinary meetings: Good-bye, good old Art, we will be thinking of you.


Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, I am sure that every member of this house joins in the gracious tributes paid by the Prime Minister (Mr. St. Laurent) and the Leader of the Opposition (Mr. Drew) to the memory of one who not only adorned this chamber but who often enlivened a dull evening with a witty contribution. Only ten days ago I happened to be in the west and I spoke to Mr. Smith over the telephone. He told me how well he was feeling and I was very glad indeed to know that the rest was doing him good.
We shall long remember him. Regardless of our political differences in this house we do admire a bonny fighter, a man of courage and of wit, as he was. Mr. Speaker, we join with all others in this house in extending to Mrs. Smith, a charming personality herself, and to his family our heartfelt sympathy in their loss.
He was always busy, kindly, interested and friendly. I think it might be fitting to say that we all hope and pray he may rest in peace.


Mr. Solon E. Low (Peace River):: Mr. Speaker, those who have preceded me have in fact spoken for all of us. There is little that I 'can add to what has been said already by way of tribute to this great man except to say that while I was a member of the Alberta government I was more or less closely associated with Art, who was the crown prosecutor in Calgary for a good many years. During those years of close association I learned to admire his great capacity, his great abilities and to know him for the lovable character he was.
(Mr. Drew.]

When I came to the House of Commons and shared with him membership in this assembly I learned to love him even more. On behalf of our group I want to say that we do join in the gracious and loving tributes that have been paid this morning to our departed friend, and join with others in extending to Mrs. Smith and the family our deep regrets and assuring them that we are with them in spirit at this time of their trouble.


Mr. D. S. Harkness (Calgary East):: Mr. Speaker, I believe I knew Art Smith better than anyone else in the house. We were elected to the House of Commons at the same time in 1945. We came down to Ottawa together and occupied the same office throughout the time he was a member. Probably no two men ever enjoyed a closer, finer and more harmonious political partnership and friendship, one which to me was an education and inspiration. Art Smith had an extraordinarily quick mind and an unusual gift of expressing his ideas in forceful and clear language. His wit was proverbial in this house and in Calgary, and I think probably I can say throughout the country.
His death is a great shock and a great loss to all of his very wide circle of friends. I wish to join with others in offering my deepest sympathy to his wife and family and to express my own grief at the loss of a great friend and a great Canadian.


Mr. J. M. Macdonnell (Greenwood):: Mr. Speaker, as Art Smith's deskmate, perhaps I may be allowed one word. He had the unique gift of winning the love and admiration of all who knew him and I am sure that none of us here will ever forget him.


Mr. Jean Francois Pouliot (Temiscouata):: Mr. Speaker, as one of the senior members of the house I wish to join with those who have paid such fine and well-deserved tributes to our departed friend. You must remember, sir, the evening when you were kind enough to call me over the telephone to invite me to a reception you were giving for the late Mr. Smith after he had delivered his famous farewell speech in the House of Commons. That speech will always be considered as a classic example of parliamentary eloquence. I had the privilege through you of meeting Mr. Smith for the last time with some of his friends in your study. At the time he was suffering from the illness which took him away, but he was just as genial, kindhearted and thoughtful as ever. I had one more occasion, thanks to you, to appreciate his serene philosophy of life.

Mr. Smith was an outstanding member of the bar, of the Canadian Bar Association and of the House of Commons of Canada. He made a success in each field that he entered. Why? Because, as has been so well said, not only was he gifted with a powerful intellect, he had a big and generous heart. This is the reason why this faithful servant of the people before the bar of his province and of Canada at large, as well as in the House of Commons of Canada, belongs to a legion. He will belong forever, like Tommy Church and others of my dear friends, to that legion. Why? Because he has done his duty and because he has been so generous and kind to all. I wish to convey my heartfelt sympathy to his charming wife, Mrs. Smith, to his children, and to his roommate and closest friend in the House of Commons, the hon. member for Calgary East.
Right Hon. J. G. Gardiner (Minister of Agriculture:	Mr. Speaker, I am sure many
of those who were associated with Art Smith in the days when he was "Sport" Smith would expect me as one of two members of this house who were of the group to express a word on their behalf. The hon. member for Fort William was associated with him in the days when he became known as "Sport" Smith in the college life of the city of Winnipeg. I myself had the privilege, and it was a privilege, of engaging in contests with him on the football field in Regina as long ago as 1904 and 1905. From then until the time he left this house a very close understanding and friendship existed between us.
Reference has been made to the fact that he thought quickly. Anyone who ever contested with him in sport on the football field or on the hockey ice knows that his quick thinking was not only a fact of recent years. He was one of the most effective players of his time and earned the title of "Sport" Smith because of his quick thinking followed by action on the football field and hockey ice. I am sure all those who were about his own age and who are still with us would expect me as one who knew him in those days, and who was associated with him, usually on an opposing team, to say a word of appreciation of the long association we had with him as athletes in the early days and in politics in later years. I do not need to say that I have already sent a message of personal sympathy to Mrs. Smith, and am very anxious to join with members of the house in extending the sympathies of the whole house to the family of one who was appreciated, respected and liked, both in his days of sport and in his active political life, by opponents and those who were associated with him as well.
Privilege-Mr. Cannon


Mr. Speaker:: If it is the wish of the house I shall immediately send a telegram of sympathy to Mrs. Smith, and when Hansard is printed tomorrow I shall write to Mrs. Smith and send her a copy of these proceedings.
(Translation):



PRIVILEGE


Mr. Charles Cannon (Iles-de-la-Madeleine):: Mr. Speaker, I rise on a question of privilege in order to call the attention of the house to an editorial published in yesterday's he Devoir. This newspaper criticizes certain remarks I made in this house on the Canada Elections Act. The writer of this article expresses opinions which differ from mine; that is his privilege. There is however one statement against which I wish to protest most energetically. It is stated there that French is only my second language.
Mr. Speaker, I flatter myself that I speak French and English with equal facility but if there is one language which is most assuredly not a second language with me it is French. I have learned French as a child, in my own home; my whole upbringing has been in that language.
I was a student in the Quebec seminary for eight years and at Laval university for three more. All my studies, in these two institutions, were carried out in French.
That is why I wish to put matters right and to state, most emphatically, that French is certainly not a second language with me.


Jean-François Pouliot: Mr. Speaker, a friend of mine told me that Le Devoir was taking me to task, along with my distinguished colleague, the hon. member for Iles-de-la-Madeleine (Mr. Cannon). I do not know what Le Devoir has said because I sent that newspaper back when I found out it was falsifying my speeches and I have not read it since then. If Le Devoir feels I am wrong, that means I am right.
(Text):



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
George Alexander Drew: It is possible that this question should be, regarded as a notice rather than as a question because the matter was brought to my attention just this morning. I am directing my inquiry to the Postmaster General and it relates to earlier questions. In view of the very great increase in population, and the extremely heavy mail delivery to Woodroffe on the outskirts of Ottawa, is it

Inquiries of the Ministry possible that delivery from house to house may be arranged there instead of the present very difficult arrangement of picking up that mail from the local post office? I end these remarks by saying that I would naturally expect the answer that this will be merely treated as a notice on this occasion.


Hon. Edouard Rinfrel (Postmaster General):: I will take it as such.


Mr. Graydon:: Look over Lakeview, Ontario, at the same time.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. George H. Hees (Broadview):: I should like to direct a question to the Minister of National Defence. In answer to a question by the hon. member for Three Rivers (Mr. Bal-cer), last Thursday the department stated in a return that of 700 officers in the Canadian forces above the ranks of lieutenant commander, major and squadron leader only 17, or 2i per cent, are French-Canadians.


Some hon. Members:: Order.


Mr. Speaker:: Order.


George Harris Hees: In view of the fact that they are providing one-third of our fighting forces in Korea and Europe and, in the opinion of those who served with them overseas, they are the equal-


Some hon. Members:: Order.
i


George Harris Hees: -of any servicemen who ever fought for this country-


Mr. Speaker:: Order. I think the hon. member is going a little beyond my ruling of the other day. I suggest he might put his question now.


George Harris Hees: I was just coming to it, Mr. Speaker. Will the minister-


Mr. Mayhew:: I would expect the hon. member for Peel (Mr. Graydon) to raise the same objection that he raised the other day.


George Harris Hees: -tell the house why his department has promoted only such a very small proportion of French-speaking Canadians, in view of their proven ability and courage? I believe that all members of this house-


Some hon. Members:: Order.


George Harris Hees: -will agree that they are deserving of equal opportunities for promotion.


Mr. Abbott:: Answer in French.


Hon. Brooke Claxlon (Minister of National Defence):: Yes, Mr. Speaker, I will be very glad to answer, and I will make it a good

deal shorter than the question. The answer is that the relatively small number of Frenchspeaking officers holding senior posts in the armed forces is due to the fact that there were a relatively small number of French-speaking officers in the armed forces in 1939 who are still in the armed forces. Altogether there are only 24 French-speaking officers in the armed forces today who were in the armed forces in 1939. A list appears in Hansard for yesterday showing the ranks they held then and the ranks they hold today, and I think it will indicate that they have done very well indeed.



AUXILIARY SERVICES IN KOREA


Mr. W. G. Dinsdale (Brandon):: I wish to direct a question to the Minister of National Defence. In view of the discussion which has taken place in the house during the present session, has the government made any decision concerning the offer of the voluntary welfare organizations to provide welfare services for the armed forces?


Brooke Claxton: Mr. Speaker, I have nothing to add to what has already been said in that connection. There is, we believe, neither occasion nor opportunity for using the welfare agencies in action in Korea. There is only one there, which is a small unit of the Salvation Army, which was in Japan with the Australian occupying forces, and it moved with the Australian regiment to Korea. There are no other welfare agencies. No responsible person who has been there has recommended to me that there should be any welfare agencies. In fact, the only recommendations regarding welfare we have received from responsible people who have been there are to the effect that friends of the troops should write more often, more local news should be sent, and there should be Canadian entertainment.



IDENTIFICATION FOR SOLDIERS ON LEAVE IN NATO COUNTRIES

Gordon Graydon: May I direct a question to the Minister of National Defence? Is it true that Canadian soldiers in the 27th brigade who are going on leave to various NATO countries in Europe are required to have a passport before they enter those countries? If so, who is paying the $5 for the passport fee that is so charged?


Brooke Claxton: This is one of the questions which depend on the adoption of legislation by the other countries along the lines of the legislation that we have already passed through both houses this session. So far as I know, no other countries have yet adopted

that legislation. In the meantime, however, our soldiers do not carry passports; they carry identification certificates, for which no charge has been or will be made. I am informed that these identification certificates will be accepted by other countries in lieu of passports.



RYE AND FLAX


[Stage Direction]
On the orders of the day:
Mr. G. M. Ferrie (Mackenzie):: Since this session is drawing to a close, I wonder whether the government would give consideration to putting the 1952 rye crop under the wheat board?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, this is rather a searching question on government policy-


Gladstone Mansfield Ferrie: I do not need an answer.


Some hon. Members:: Oh, oh.


Mr. Speaker:: I understand the question is withdrawn?


Gladstone Mansfield Ferrie: No. I do not need an answer. I just asked for consideration; that is all.


Mr. Sinnott:: I should like to add a question supplementary to the question asked by the hon. member. When the minister is considering putting rye under the wheat board will he also consider flax?



BUSINESS OF THE HOUSE

Hon. Alphonse Fournier (Minister of Public Works):: Before proceeding with the orders of the day, and considering Bill No. 36, may we move concurrence in the amendments made by the Senate to Bill No. 33?


Mr. Speaker:: I understood the hon. member for Queens wanted to ask a question.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr.  W. Chester S. McLure@Queens: Thank you, Mr. Speaker. I desire to direct a question to the Minister of Transport. Has the minister been advised of the tragic accident at Travellers Rest, Canadian National Railways crossing, Prince Edward Island, on Wednesday last when two people met death, and three more were seriously hurt?


Hon. Lionel Chevrier (Minister of Transport):: Yes, I have been advised of the accident. An investigation is taking place at the moment.
St. Lawrence Waterway



ST. LAWRENCE WATERWAY ST. LAWRENCE SEAWAY AUTHORITY   CONCURRENCE IN SENATE AMENDMENT

Lionel Chevrier: the second reading of and concurrence in an amendment made by the Senate to Bill No. 33, to establish the St. Lawrence seaway authority.


Mr. Adamson:: Will the minister explain the amendment?


Lionel Chevrier: This is an amendment to section 7 of the act, which has to do with the powers of the president. It is a cutting down of the powers, and the amendment reads as follows:
7. (1) The president is the chief executive officer of the authority, is charged with the general direction and control of the business of the authority, and shall have such other powers as may be conferred on him by the bylaws.
In other words, it gives to the other directors the authority to pass bylaws authorizing the president and general manager to do certain things. The government is prepared to accept this.


Agar Rodney Adamson: To what extent does it restrict the president's powers as compared with the original legislation?


Lionel Chevrier: Unfortunately I have not section 7 before me. But section 7, over and above giving to the president the control of the corporation and also authorizing him to delegate to the other members of the authority powers, has no longer that discretion here except that they be given to him by the bylaws. In other words, the bylaws may authorize the president to have such authority. As I said originally, it is a cutting down to some extent of the authority of the president.


[Stage Direction]
Motion agreed to, amendment read the second time and concurred in.


[Stage Direction]
The house resumed, from Monday, December 17, consideration of the motion of Mr. Garson for the second reading of Bill No. 36, to amend the Combines Investigation Act.
Mr. E. D. Fulton (Kamloops):: Mr. Speaker, when the house rose last night I had dealt with the fact that the government has denied us the right to obtain evidence of the effect of price maintenance on prices in Canada, so that we are in no position to determine whether or not it hurts the consumer. I had then shown that there is no evidence that its elimination would result in a reduction in the cost of living; whereas there is

Combines Investigation Act evidence that the number of items which are subject to price maintenance, and which enter into the cost of living index, is practically negligible. Therefore we are absolutely without evidence from which to make up our minds whether this practice hurts or helps the consumer, and certainly without evidence on which to base the harsh criticisms made by the Minister of Justice (Mr. Garson) last night.
The government's whole approach to this problem has been to raise great hopes in the minds of the public that they will do something to reduce living costs. Having raised those hopes they find themselves impotent to act effectively, and they are now seeking a way out of their awkward position by an attempt to make a scapegoat of the small retailer who relies on price maintenance for his protection. If this bill passes it will be at the expense of the retail merchant who is being condemned unheard.
I quoted the evidence of Mr. Fred McGregor, the star witness for the government's case, to the effect that it is not the manufacturer who wants or benefits most from this practice, but the retailer. This fact should be most carefully assessed. It shows the error of those government propagandists who seek to whip up prejudice by painting a picture of greedy manufacturers weaving a web of control over the whole economy. The truth is that the system of price maintenance was worked out by the small retailers as a means of self-protection against the power of big interests. In the absence of any conclusive proof to the contrary-and certainly none has been offered
-our position is that anything which preserves and promotes a system whereby trade in Canada is shared amongst a large number of independent businesses, and prevents a further concentration of control in the hands of a few powerful interests, is in the longterm interests of our general economy, including the consuming public.
Before passing on to the next consideration, that is the extent to which the retailer may be harmed if this legislation passes, I think we should mention the fact that, while there is no positive evidence that the principle itself is harmful, there is some evidence which we did manage to get on the record- even though the government resisted-to show that the practice has been beneficial in a small way. I should like to refer to some figures in this respect, but without drawing general and sweeping conclusions from them as the minister was prepared to draw last night from the few figures which he put on the record. I feel it is important to have them before the house so that it can be shown that there are figures which tend to establish that price maintenance is not harmful but rather beneficial to the consumer.
I would refer particularly to the table which appears at page 787 of the committee's proceedings. It was furnished to us by the Retail Hardware Association of Ontario. I would ask the permission of the house, Mr. Speaker, to place this table on Hansard as it appears in the committee proceedings.


Some hon. Members:: Agreed.


Edmund Davie Fulton: The table is as follows:
Retail mark-up
Paint (gallon outside white)
Price maintained
Imperial varnish "Floglaze"	
Lowe Bros	
Canadian Industries Limited "CIL"..
Not price maintained
Scarfe's	
Average 1951 price
Flashlight batteries (each)
Price maintained
National carbon No. 2 "Eveready".. Floor waxes (1 pound paste)
Price maintained
Edward Hawes "Hawes"	
Boyle Midway "Old English"	
in % of retail
1939	1951	% increase	price4.35	7.40	70-1	21-64.45	7.45	62-9	21-44.20	7.45	77-4	22 14.00	7.35	83-7	22-415	.196	30-7	31-245	.5194	15-4	17-049	.6075	24-0	25-8

Combines Investigation Act
Retail mark-up in % of retail
	1939	1951	% increase	price
Electric light bulbs (60 watt bulb)				
Price maintained Canadian General Electric 		.20	.196	-2	25-0
Aluminum cooking utensils				
Price maintained Aluminum Goods Mfg. "Wear Ever" (#141 double boiler) 	
Supreme Aluminum "Standard"	2.15	3.88	80-4	33-4(#402 double boiler) 	1.55	2.70	74-2	33-5Not price maintained General Steel Wares "Triumph"	(# 53 double boiler) 	1.45	2.99	106-2	33-1Hand tools	Not price maintained [DOT] Nail hammer 51J Stanley, 16 oz.	bell faced 	1.50	3.19	112-17	33-2Hand saw Disston D-8, 26"-8 point. . Brick trowel, Rose	4.00	7.01	75-3	33-6#110 Philadelphia pattern 	2.90	5.35	84-4	33-6Level #1294 Stanley, 24" carpenter.. Carpenters planes	.70	1.82	158-8	33-5Stanley #4 smooth 	4.75	10.10	112-6	33-3Stanley #78 rabbet 	3.75	7.99	113-1	32-2National price	trends	(D.B.S.)	1939	1951 (Sept.)	% increaseAll commodity prices 	... 100	221-6	121-6Food 	... 100	251-1	151-1Clothing 	... 100	206-9	106-9Home furnishings 	.. . 100	199-1	99-1Cost of living index 	.. . 100	189-8	89-8I should like to refer to some figures in that table, showing trends for both price-maintained and non-maintained lines of goods. They show, first with respect to paints, the percentage increase in price from 1939 to 1951 in the price-maintained lines averaged about 70 per cent, whereas the increase in a line of non-maintained paints was 83-7 per cent in the same period. The table also contains a comparison between maintained and non-maintained items of a type which enter into the requirements of an ordinary household, aluminum cooking utensils.	The
Supreme Aluminum "Standard" No. 402 double boiler showed a price increase from 1939 to 1951 of 74-2 per cent, that article being price maintained, whereas General Steel Wares "Triumph" No. 53 double boiler, nonprice-maintained, showed an increase of 106-2 per cent. It is significant, Mr. Speaker, that the two articles started from the point where
the non-maintained article was 10 cents lower in price in 1939 and they ended up with the non-maintained article 29 cents higher in price in 1951.
This table contains other figures which tend to illustrate that, in the general field of commodities not covered by price maintenance, the percentage increase in price during that period has been very much higher than the percentage increase on prices which are subject to price maintenance. The other interesting feature showed by this table is that the profit margins for those lines of goods taken by the retailers on both price-maintained and non-maintained lines are so close as to be almost identical in the different categories of goods of the same quality. I believe it can be said that there is evidence to the effect that price maintenance, instead of hurting the consumer in those respects, benefits him.

Combines Investigation Act
There are two other tables to which I should like to refer. The first is found on page 641 of the committee's proceedings, and is a table submitted by the Canadian Association of Radio and Appliance Dealers. They show the profit margin as between price-maintained and non-maintained goods. For washers they show an average discount under resale price maintenance of from 30 to 35 per cent, and for non-price-maintained, of from 40 to 46 per cent; for electric stoves, the price-maintained average was 33J to 37J per cent, and the non-price-maintained average was from 30 to 50 per cent. For refrigerators, the comparable figures are 30 to 35 per cent against an average of from 35 to 50 per cent on non-maintained items.
The next table, beginning at page 643 of the committee's proceedings, is of particular interest since the Minister of Justice last night stated as a fact, without any evidence to support it, that resale price maintenance effectively eliminates competition. I am not going to go into detail on this point, but I do wish to state that that was a conclusion which was not warranted by the evidence before us. The evidence before us shows that, though there is a restriction on competition in one way, that is vertically, in effect there is created a greater and more effective competition between manufacturers and retailers of competing lines. This tendency is borne out by the table appearing on page 643 of the committee's proceedings. It shows that in the field of the electric appliance manufacturing industry, which has been so much condemned because it follows this practice of price maintenance, far from there being too little competition there is as much competition as in any other field, if not more. In the field of radios there are over seventy different brands competing generally in Canada; in electric refrigerators twenty-eight different brands; electric stoves, twenty-three different brands competing in Canada; and in electric washing machines, seventy-five different brands all competing for the market. It simply cannot be said, therefore, that resale price maintenance eliminates competition when you have that number of brands competing in the Canadian market, unless the minister is prepared to say that, for instance, some seventy-three makers of washing machines have all united to form a gigantic combine to eliminate competition between them. If that is the inference we are to draw from the minister's remarks, it is a sorry reflection upon his administration of his own department, and the efficacy of the combines administration branch, which latter implication I for one do not accept.


We have seen that there is an almost complete lack of evidence as to whether harmful effects follow from this practice of price maintenance. On that basis we submit there is no justification for taking the drastic steps contemplated by this legislation. This position is reinforced by the fact that there is specific and convincing evidence of the dangers and disadvantages which will follow to the small retailer. I have mentioned the fact that it is not the big manufacturer but the small retailer who designed and wishes to maintain the assistance of this practice, as shown by the evidence of Mr. McGregor, where he said the person who wants it and benefits most is, unquestionably, the retailer, not the manufacturer.
I should like to refer to the evidence contained in the brief submitted by the president of the Trades and Labour Congress of Canada, as reproduced at page 380 of the proceedings of the committee. In the brief which he submitted, Mr. Bengough pointed out that in the view of the Trades and Labour Congress of Canada the elimination of resale price maintenance, far from increasing competition, might in fact lessen it to the detriment of the independent operator. Here is what Mr. Bengough said:
Before accepting these general conclusions without reservation, it might be worthwhile to consider what would happen in specific cases when and if the law is amended to make resale price fixing practices illegal. Take for example two large manufacturers of men's clothing. The one manufacturer owns or controls, or owns and controls, his retail outlets. He, of course, has full control of the resale prices of his products. The other manufacturer operating in direct competition with the first does not own any retail outlets. He, however, provides services to those independent retailers who handle his products and, as well, fixes the resale price of his goods. If the practice of resale price maintenance is ruled illegal, it would seem fairly obvious that the second manufacturer would be required to cease his present practices. Would the first be required to stop fixing the retail price of his goods which are sold through his own retail stores? If the answer to this question is in the negative, then will not the result of the new law be to reduce effective competition in the men's clothing trade rather than to strengthen it?
Perhaps the most conclusive evidence that it is the little man that wants this resale price maintenance as a form of self-protection is to be found in the fact, already referred to, that the big men represented by Eaton's and one or two other large department stores have come out definitely as being opposed to the practice.
Upon the question of whether or not there is in fact danger of disaster to the small retailer if price maintenance should be eliminated, it must be recognized at the outset that there is a great deal of conflicting opinion. There is much theory, based upon a difference in economic circumstances

between now and former years, and alleged differences in trading conditions which that brings about, enlarged upon by the minister and particularly emphasized by Mr. Fred McGregor who, as I have pointed out, based his whole opposition to resale price maintenance exclusively on theory and who rejected any consideration of fact and physical results in arriving at his conclusion. There is much theory to the effect that the elimination of this practice will not adversely affect the retail merchant-that is, the elimination of price maintenance-because, it is said, loss leaders cannot arise under present day conditions.
Mr. Speaker, I do not question the right of members of this house to form opinions and conclusions. Indeed, it is our responsibility to do so. I say, however, that we should place ourselves in possession of the facts before being asked to form those conclusions; and we are not in possession of the facts. But while I certainly believe that it is our right and our duty to form conclusions, I also believe that the person who is in the best position to form a correct and accurate conclusion as to what will be the effect upon him of legislation eliminating price maintenance is the retail merchant himself who has experienced the lack of resale price maintenance in the past and who is going to experience it in the future if this legislation is passed. I make no bones about it that I would rather accept the opinions and the conclusions of these gentlemen, based upon their practical experience, than the conclusions and theories, based upon considerations of policy only, of those who have absolutely rejected any question of fact in arriving at their conclusion.
We have had evidence from many independent retailers to the effect that they will be disastrously affected by the practice of loss leadering at the hands of the big stores, if price maintenance is eliminated. In the proceedings of the committee there are certain passages that I think I should read in this connection, but before doing so, as perhaps the most authoritative statement of the dangers and the evils of the practice of loss leadering, I should like to quote a statement from the report of the royal commission on price spreads of 1935, at pages 228 and 229. In the chapter dealing with distribution we find these passages; and I am going to take the liberty of placing them on the record at some length because, as I say, they are the most authoritative statements of the effects and the evils of this practice in Canada. They start by saying:
One of the most common practices of modern merchandising is the use of "leaders" or "loss leaders".
Combines Investigation Act
Then they go on to say:
Special mention must be made of the disastrous effect of loss leaders on the primary producer. The use, for example, of butter as a loss leader was proved to be a very widespread practice. Since a reduction in the price of butter will not perceptibly increase its consumption, this practice very definitely causes a loss to the dairy producer that far outweighs any possible gains to the consumer. This is equally true of other standard agricultural products. Their use as loss leaders establishes, as customary, a price that reacts to the detriment of the primary producer.
May I pause here to interject that it is a fact that marketing legislation, such as we know it, to an increasing degree has been designed to protect the agricultural producer, and those dependent upon the agricultural economy, against this vicious practice of loss leadering, amongst other things, and to protect him in general from unfair competitive practices. Then they go on to say:
Likewise, a manufacturer, who has built up a wide demand for his products, is injured when these are regularly sold1 at cut prices. Because the profit margin is thereby lost on such goods, competitors of the price-cutter lose interest in the goods and push more profitable lines.
Then they go on to point out the dangers to the consumer that result from this practice, and they emphasize the point that although the consumer may get some small immediate benefit-although that itself is questionable, owing to factors which they emphasize-in the long run the consumer suffers. They emphasize that point as follows, and I am now reading at page 229:
The consumer who purchases goods at cut prices undoubtedly gains on those items. But leaders-
That is, loss leaders.
-are offered primarily to draw the public and create the impression of similar value as applied to goods on which prices have not been cut. While the difficulties of judging quality and price are growing with the increasing use of branded and trademarked articles, the average purchaser can pick out the "loss leaders" from the other goods offered; otherwise there would not be the same widespread use of this device.
Then they go on:
The competitors of the store using the "loss leader" are, however, the persons chiefly affected.
Those are -the persons that I am dealing with at the moment: the competitors of the big stores who use loss leaders. I continue:
That the deliberate use of cut prices to draw patronage away from competitors is an unfair trade practice, is quite clear. Such reductions are not prompted by any desire to serve the public by giving lower prices. One purpose is to attract customers to whom the store hopes to sell goods that are not loss leaders, at substantial profits. Another purpose is to create the illusion of lower prices on all articles. That this end is not always attained does not in any way lessen the unfairness of the practice.
They then go on to say:
As independent merchants, singly, cannot meet the leaders of chain stores, many have joined the voluntary associations already described. By acting

Combines Investigation Act
together, such groups of merchants can and do follow practically the same policy of using "loss leaders" as is pursued by the corporate chains. Those independent merchants who are not members of such associations are, therefore, subjected not only to the unfair competition of chain stores but also to that of voluntary chains.
Surely nothing could make more clear the danger that, by eliminating resale price maintenance-the only protection the retailer now has against the practice of loss leader-tog-the effect will be not to increase competition but, on the contrary, more and more to drive merchants into organizations, associations or chains, either voluntary or compulsory, whose only effect and whose only purpose would be in fact to decrease competition. That emerges most clearly from this considered statement of principle of the royal commission on price spreads. They conclude as follows:
We condemn the practice of loss leaders as unfair, promoting wasteful competition and seriously affecting the income of certain classes of primary producers.
Then they go on to mention the difficulties of designing effective legislation against loss leaders.	I shall have something to say
later about the question of the difficulty of legislating against it.
Then, so far as the evidence before our committee is concerned, let me refer particularly to the evidence given by Mr. Bengough at page 372, where it says:
Q. What is your view, would you agree that it would only be fair, if we are going to introduce legislation to outlaw in blanket fashion all price maintenance agreements, that we should at the same time introduce legislation to prevent the loss-leader practice?


Mr.   Bengough@: I think it would be vital it should be done.
And then there was further evidence from the retail merchants. I refer to the evidence of Mr. Preston, who was secretary-manager of the Canadian Pharmaceutical Association. At page 132 of the proceedings of the committee we And this passage-and it should be noted that for many years Mr. Preston was a practical retailer before assuming the position he now holds. He referred to the length of time that the loss-leader device has been in effect, in this fashion:
The loss-leader device is not a new device; it has been in practice particularly in the province of Ontario since the turn of the century, and the only effective means that has been found so far to curb it is price maintenance as we know it today.
We maintain that without price maintenance the loss leader would be on our doorstep tomorrow and chaotic conditions similar to those in the 1920's would result.
Mark that-not the 30's, but the 20's, when there was chaotic condition in the retail trade. He goes on to say:
We do not like monopolies; they are bad for the country, whereas the independent merchant is the

backbone of every village, town and hamlet. Surely the government will do nothing to hurt him.
Unfortunately Mr. Preston's confidence in the present government is not justified.
Then he proceeds to give some specific examples of how it operates. At page 147 we find this statement by Mr. Preston:
A. No. That is right. The loss leader in the drug business has been a thing sold at crazy prices. For example, I have sold Baby's Own Soap which sold normally for 10 cents, and when we opened our stores we sold it at 1 cent-we started off at 5 cents and the independent druggist thought he could beat us and he cut the price to 4 cents; then we brought it down to 3 cents and he sold it at 2 cents, and, finally, we sold it at 1 cent, and we did that-I say "we", I mean the chain store-"we" put that independent druggist right out of business, and he was a good solid citizen, a member of the city council in the city of Toronto. That is loss-leader.
And continuing with the evidence of Mr. Preston at pages 151 and 152:
A. Well, we assume that the minute the government were to legislate against price maintenance every article that is now price-maintained would become overnight a loss leader.
And again:
A. Yes, sir, and that is why it was very difficult to operate a retail drug store in the urban centres prior to price maintenance. It was almost impossible to make a fair living.
Sir, I submit that those answers from a practical man, a man as well qualified to draw conclusions as most other people would be, if not more so, demonstrate clearly, quite contrary to the theories which have been advanced to the effect that loss leadering could not occur at the present time, that there is imminent danger of loss leadering if this legislation passes. There is no other protection available to the retail merchants against the practice of loss leadering. That has been most clearly established by the evidence.
Here I would observe that our committee, in its majority report, which was dissented from by all the members of the official opposition, says that there is an effective answer to the practice of loss leadering, in section 498A of the Criminal Code. That statement was supported in his speech last night by the Minister of Justice.
Let me point out that the opinion of these theorists-for the minister advanced nothing but theory-is contradicted by the opinion- not just the opinion, but by the factual statement-of the government's star witness, Mr. Fred McGregor.


Mr. Sinclair:: Your witness.


Edmund Davie Fulton: No.


James Sinclair: The Tories asked for him and the Tories got him.


Edmund Davie Fulton: Oh, the hon. member for Coast-Capilano takes great pleasure in recalling the fact that the evidence given by Mr. McGregor, in general, supported the case of the government. But the hon. member has not yet justified his refusal to allow us to call any other witnesses, after Mr. McGregor had finished his evidence, and after Mr. McGregor had been allowed to depart from the rigid procedure that was laid down in the case of every other witness who came before the committee.


James Sinclair: He was your witness. I was very generous.


Mr. Fleming:: You do not know the meaning of generosity.


Edmund Davie Fulton: The attitude now being taken by the parliamentary assistant, who was chairman of the committee, is ample demonstration of the fact to which I directed attention yesterday, that his policy in committee was directed mainly toward effectively throttling all attempts to get an impartial and informed opinion. He is doing his best now to carry that same effort forward in the House of Commons. I suggest he will have his opportunity to make his case a little later on.


James Sinclair: And I will not take the two hours you are taking.


Edmund Davie Fulton: I know the points I am making are hard for him to take.


An hon. Member:: What points?


Edmund Davie Fulton: He did his best to prevent their coming out in committee; but I can assure him that he will not succeed in preventing their coming out in the House of Commons.
I have just pointed out that the government majority on the committee, along with the Minister of Justice, have stated that there is adequate protection against the practice of loss leadering, in section 498A of the Criminal Code. However, the star witness for their case, the man who has had more experience than any other man in Canada in dealing with combines, the man who was combines commissioner for twenty-five years, before his resignation was forced upon him by the government, has stated clearly that section 498A is no answer at all to the danger of loss leadering.
Let me read from his evidence as it is set out at page 604. At that point there had been some discussion as to whether or not there was danger of loss leadering if price maintenance was eliminated. We had been asking him whether or not in fact there could be legislation which would be effective against
Combines Investigation Act the practice of loss leadering, or whether it was a fact that the price maintenance system was the only effective answer yet devised.
Mr. McGregor referred to the efforts to deal with loss leaders by legislation, in the form of certain provincial statutes. Then, in connection with the British Columbia statute, I took the opportunity of saying:
It just does not work. It had to be made so full of holes it just does not work.
This is the answer by Mr. McGregor:
A. That is the difficulty of producing any bill that will work, and that is the point I am stressing here. It is exceedingly difficult to draft legislation that will prevent these practices we have in mind and still not injure the public in a serious way.
The "practice we had in mind" was the practice of loss leadering.
The next question and answer were as follows:
Q. You said on Wednesday, in answer to a question from me, that it could be done. You are not now going back on that, are you?
A. I said that lawyers should be able to produce something. I still think they may. We were not able to do it in our struggles with the problem.
Mr. McGregor was the combines commissioner when section 498A was placed on the statute books. He did not refer us to a single prosecution under section 498A and at no point did he say, when under questioning about loss leadering, that that section was the answer to that practice. But he did say that they had not been able to design effective legislation against the practice of loss leadering.
Then we have the report of the price spreads commission, which deals with this matter at page 229, and I quote as follows:
We condemn the practice of loss leaders as unfair, promoting wasteful competition and seriously affecting the income of certain classes of primary producers, but in seeking a solution for the problem through legislative remedies we are confronted with certain difficulties.
They then point out that you have to make so many exceptions to meet legitimate cases of reduced prices that your legislation becomes practically unworkable.
I rely not only on those authorities but on other authorities as well. Perhaps these authorities will be acceptable to the Minister of Justice and the hon. member for Coast-Capilano (Mr. Sinclair), because they are authorities of the Liberal party. When section 498A was discussed in the house in 1935 we had clear and specific statements from prominent Liberal authorities, both lawyers, that the section as then enacted was completely unworkable, was absolutely useless, and that we should not even bother to put it on the statute books. I refer first to the statement by Colonel Ralston. I do not think

Combines Investigation Act the hon. member for Coast-Capilano will condemn Colonel Ralston or dismiss him as a man whose opinions are not to be regarded. Here is what he said, as reported at page 3479 of Hansard of June 10, 1935.


Mr. Knowles:: That was before the election?


Edmund Davie Fulton: That was before the election. I quote:
I say on the construction of the act itself it is nothing less than a snare and a delusion so far as the mercantile people of this country are concerned, and nothing less than a sham and mockery so far as the relief of the consumer is concerned.
After dealing with the fact that this was supposed to be protection against the practice of loss leaders, he says:
I submit to you, Mr. Chairman, that a section of this kind is just silly; it is just meddling, that is all; interfering and irritating without doing the slightest good.
That was section 498A, the section upon which the minister relies.


Mr. Garson:: Does the hon. member agree with the sentiments which he has just quoted in relation to legislation that was brought in by the Bennett government.


Edmund Davie Fulton: Mr. Speaker, I am quoting-


An hon. Member:: Wiggling.


Edmund Davie Fulton: If I may have the floor for a minute I will answer. Everything that was said in our committee by the government members and by the government experts who were before us indicates to me that although Colonel Ralston's language was a little strong nevertheless it is true that the effects of section 498A were not those which the government introducing it had hoped would follow. I would point out further to my hon. friend that the government introducing it itself expressed doubts as to whether section 498A would be effective, but they had the courage to attempt to find an answer. They were not afraid to try something. They introduced this legislation.
But now, when they are on the spot my hon. friends, whose party in 1935 expressed these derogatory opinions about the effectiveness of the legislation, are the ones who are wiggling; they are the ones who are now taking the opposite view and talking big and saying that section 498A is the complete answer to the practice of loss leadering.
I come now to another Liberal authority, a former minister of justice. I would ask the present Minister of Justice if he disagrees with the opinion expressed by one of his predecessors, a member of his own party. Here is what Mr. Ilsley had to say about the


efficacy of this section, and I quote from page 3487 of Hansard as follows:
To put the matter very briefly I should say it would be a mistake to pass subsection A of section 498, which is found in section 6 of the bill.
And then at page 3488:
Very little care has been exercised in the drafting of this section; apparently whoever drafted it had only a superficial view of the problem before him.
And again at page 3489:
I do not know that I have very much more to say with regard to this section, but I consider it so far short of anything that is useful that I do not think this subsection should be passed.
I confront the Minister of Justice with the same question that he has just asked me- and which I have answered. I have said that I do not think section 498A is as efficacious as those who introduced it had hoped it would be. It has not worked and I do not think it will work. I point out that those who were introducing it at the time had the courage to say that they were not certain about this, that they had given it the best consideration they could, but they were not stating as a fact that it would work.
I ask the Minister of Justice whether he is dissenting from and condemning the opinions expressed by Colonel Ralston, an eminent lawyer, and by the Hon. Mr. Justice Ilsley, who was his predecessor but one in the office which he now holds? If not-and there is no answer-then we must rely upon the opinions of those two Liberal statesmen, one a former minister of justice of this government, and it becomes perfectly apparent that to eliminate the practice of price maintenance, as will be done by this legislation, will leave the retail merchant absolutely exposed and without any protection against the practice of loss leaders. I submit to you and to the house that nothing could more amply demonstrate the folly and unfairness of enacting this legislation without giving this problem adequate consideration.
And so I come back to what I referred to last night. The majority report of the committee says that if the elimination of price maintenance does affect the trade of the retail merchants the government will keep careful watch on it and then work out some other legislation. Against that I point out that Mr. McGregor says that we have never been able to design effective legislation in all our struggles with the problem.
It certainly seems an irresponsible, rash and unfair attitude on the part of the government that is administering the affairs of this country to say, "We are not certain what the results of this will be; but if the result of eliminating price maintenance is to expose

the retailer to the effects of loss leaders, then we will enact some legislation to try to fix up the matter." I ask the Minister of Justice whether the government will undertake to restore the bankroll of the merchant who has gone bankrupt? Will he include that in his legislation? Will he restore the position of the merchant who has suffered in the meantime while the Minister of Justice is making this diagnosis to find out whether his own cure has killed the patient? If the government will say that they will take the responsibility of seeing that no merchant goes bankrupt as a result of having eliminated this protection, then perhaps one could support the position. But until the minister says that, until the minister is prepared to guarantee his medicine, in fact, to take his own medicine, I say the legislation should not be supported.


Donald Methuen Fleming: Try it out on him first.


Edmund Davie Fulton: And so we are left with the conclusion that there is no evidence to show that the legislation will benefit the consumer; but there is evidence that it will harm the retailer. I should like to refer now to the type of harm which will follow from the enactment of this bill. Because it is significant that certain of the large departmental stores are ' supporting this legislation, I think we should refer to some of the findings of the royal commission on price spreads with respect to the predominant position which these stores enjoy in the economy of Canada. On page 207 of the report of the royal commission, in the chapter on "Distribution" and under the heading, "Possibilities of Future Expansion", we find the following:
The concentration of business in the hands of a few companies is far greater in Canada than in any other country for which information is available. In the United States in 1929 there were seventeen companies operating 2,400 department stores with sales of $1,500 million. The sales of these seventeen organizations, however, represented only 34 per cent of the total department store business in the United States whereas the three largest companies in Canada handle 80 per cent. The largest single department store and mail-order organization in the United States, Sears Roebuck and Company, had less than one per cent of the total resale business in that country, while in Canada the T. Eaton Company had more than 7 per cent.
More than 7 per cent of all retail business in Canada is done by one company alone, the T. Eaton Company. They go on to say:
It is interesting to note that the largest retail organization in Canada is in the department store and mail order field, while in the United States the largest organization is in the grocery and meat chain field. But even this company, the Great Atlantic and Pacific Tea Company, with sales of approximately $1 billion in 1929, did not occupy as dominant a position in the United States as did the T. Eaton Company Limited in Canada.
Combines Investigation Act
The fact is, Mr. Speaker, that the elimination of resale price maintenance opens up again all the possibilities of loss leadering and unfair trade practices against which merchants have devised their own protection under the system of price maintenance, and exposes them to the increasing concentration of power in the hands of a few concerns. On this point the commission had this to say, as found at page 232, as to the concentration of power in a few hands:
The concentration in retail distribution already achieved has had certain undesirable effects. Socially, it has meant that in approximately one-third of the retail business of this country, the personal factor has largely disappeared with the inevitable weakening of the ideals of service to the community, so long and honourably associated with the local independent store. That such a development has occurred in other phases of economic life makes it nonetheless to be regretted in the field of distribution.
Then they express this opinion which I think should be pondered well by the government and this house before we pass this legislation. They say:
We would add, however, that monopoly or quasimonopoly in the vitally important field of retail distribution, could not be regarded by any government with equanimity. A sound regard for the national interest could not permit two or three concerns to dictate the method of retail distribution in the country as a whole.
On that point I pause here to mention that the T. Eaton Company has very considerably expanded its business in Canada by the purchase recently of all the David Spencer Limited stores throughout British Columbia. Therefore we can see that Eaton's, which did 7 per cent of all retail business in Canada in 1929, is probably doing a considerably increased percentage today. Thus we have this position: it emerges that the result of this legislation may not be, in fact probably will not be, to preserve or promote competition in the retail field, but may in fact be, and probably will be, to increase the tendency towards monopoly of that field. In that respect I should like to quote the opinion of the National Council of Women who share the same views on this subject as we do ourselves. At page 5 of their brief the national council says that they do not agree with the MacQuarrie committee when that committee says that they do not think it imperative to make an immediate and hasty recommendation regarding loss leadering. Their brief goes on to say:
Council believes that competition in free enterprise is a healthy state but it ought not to further less leadering. In other words, what legislation is enacted ought to specifically penalize loss leadering.
May I point out today that our committee did give some thought to this matter. In about an hour and a half's session one

Combines Investigation Act morning we debated the problem of loss leadering. We had before us a recommendation designed by one of the members of the committee; but practically every member of the committee felt that, while his effort to deal with the problem of loss leadering was commendable, he nevertheless did not offer a practical solution of the problem, and indeed many members of the committee, including government members, expressed grave doubts as to whether loss leadering could be dealt with at all by legislation.
I should like to read the further opinion of the Trades and Labour Congress having to do with this subject. It is to be found at page 380 of the committee's proceedings. They had this to say:
One possibility your committee should keep in mind, and, in the opinion of this congress, make every effort to guard against, in any amendments that may be suggested, is a swing of distributive business away from the smaller outlets and a concentration of such trade in a few very large establishments.
Further down on the same page they say:
This raises two very important questions for consideration by your committee: (1) Does this indicate that resale price maintenance does not always lead to reduced competition? and (2) would the banning of resale price-fixing make it impossible for the large distributor to offer his own brands at his own fixed prices? If not. and it is difficult to see how such a law could be made to fit this type of situation, then it would appear that the large distributor would gain a tremendous advantage over the manufacturer without any apparent advantage having been gained by the ultimate consumer. Such a development would merely place more economic power in the hands of the larger distributors. It is hard to see where it would increase effective competition or efficiency. It is even more difficult to see where the public interest would be served.
In addition, as an authority on this point I want to refer to the evidence of Mr. George Hougham, who has the advantage, in addition to that of being an expert, that he comes from the province of British Columbia. Mr. Hougham's evidence is found at pages 766 and 767. Mr. Hougham is a man who has had very extensive experience in the retail trade, a man who was intimately associated with the whole of the Stevens and royal commission inquiries into price spreads, and who is recognized as an expert in his field. I want to read the following questions and answers from page 766, when Mr. Hougham was giving evidence:
Q. In other words, three department stores did 80 per cent of all department store business, but one of them did 7 per cent of all the retail business in the country. Is that right?
A. Yes, I think that is correct, but the report will correct me if I am wrong.
Q. Was that company named?
A. Yes, it was the T. Eaton Company.
Q. Do you know whether that company has since acquired other large retail outlets?
A. Oh, yes, it has.
[Mr. Fulton.1
Q. Where?
A. Notably in Vancouver, where they have taken over David Spencer.
Q. They have taken over the David Spencer Limited business all throughout British Columbia, have they not?
A. Yes.
Q. You are aware, of course, of the fact that the T. Eaton Company has indicated to this committee that they are opposed to the practice of resale price maintenance?
A. Yes.
Q. And I think you have raid already that in your view the elimination of that practice would tend to benefit mainly the large department store?
A. I think that would be the inevitable tendency.
Q. Do you see any connection between those two sets of facts, the T. Eaton Company's attitude and your opinion which you have just expressed?
A. I do not care to impute motives or to make general inferences-I do not think this is amusing, Mr. Chairman-
These words were an aside by Mr. Hougham, who was suffering from the strong attitude of the chairman of the committee, from which we all suffered from time to time. Then I go on with the quotation:


The Chairman:: No, it is certainly not. It is so unusual we are gratified to have you make such a straight statement.
The Witness: But I would think that perhaps-I know I should not be talking for the T. Eaton Company-but that is perhaps the reason they adopt that attitude, the traditional attitude that they do not want to have anybody tell them what to do.
What Mr. Hougham is expressing in those well chosen and reasonable words is that one of the reasons at the back of the mind of the T. Eaton Company in their opposition to price maintenance is probably the fact that it will improve their competitive condition vis-a-vis the small retail dealer. I am not saying that the T. Eaton Company, or any other company, in taking that attitude is doing anything illegal. It is perfectly legal, but I am stating it as a fact, which we have to reckon with, when we are considering the effects of this legislation and when we are considering what will be the position of the small independent retailer as a result of the legislation.
Now, Mr. Speaker, I would like to summarize as follows: We have no evidence that the practice of resale price maintenance is harmful at the present time with respect to its effect on prices; we have no evidence that its elimination will reduce the cost of living. My attitude in this regard is exactly the same as that of the Trades and Labour Congress, as expressed at page 379 of the committee proceedings. They say:
Whatever the committee had in the way of information-
Here he is referring to the MacQuarrie committee. I say this expression of opinion applies to the MacQuarrie committee, the

parliamentary committee, and it also is perfectly descriptive of the situation in which we find ourselves here in this house today. The Trades and Labour Congress in their brief say:
Whatever the committee had in the way of information before it about the extent of the practice of resale price fixing, it certainly didn't present your committee or any other interested party with any concrete evidence on which to base a case either for or against resale price maintenance.
So we have no evidence in that regard. But we have much evidence that it will hurt the small independent retailer. This evidence is based upon the facts that we were presented with as .the past practices in this field. We have evidence that it will bring about increasing concentration of power in a few hands, based upon the report of the royal commission on price spreads. We have evidence that the retailer has no other protection against the practice of loss leadering, except that to be found in the resale price maintenance system; and for those reasons the official opposition recommended that the proper report to be brought into the house by the parliamentary committee was a report along the following lines-and I am here reading the last three paragraphs of the report which was laid before the committee for its adoption, but which was rejected by the government majority on that committee. We suggested the committee report as follows, as shown on page 827 of the committee's proceedings:
Your committee, having been much impressed by the very real concern felt by retail merchants over the danger to them from unfair competition and loss leadering practices by powerful chain and departmental stores if price maintenance is eliminated, is of the opinion that if any legislation is ever to be enacted against the one type of practice it must be accompanied by complementary legislation against the other.
Your committee has been unable, in the time at its disposal, to study and work out legislation which it can confidently recommend as being constitutional and effective to meet the danger of loss leadering.
Your committee therefore reports that it is not in possession of sufficient evidence on which to base legislation and recommends that further careful consideration be given to this whole subject, and particularly to the question of fair trade laws along the lines of those in force in the United States of America, as a proper and workable solution of the problem.
That recommendation which we placed before the parliamentary committee still represents the position of this party.
In the light of the considerations that I have laid before the house in analysing the proceedings of our committee and the factors which emerge from a study of this situation, we can see the folly and unfairness of enacting this legislation at this time and leaving the
Combines Investigation Act small man at the mercy of big business, with no certainty whatsoever of benefit to the consumer.
Just 16 years ago the country was shocked and alarmed at the revelations of the inroads that big powerful chain monopolies had been making into the distributive trade of Canada, at the expense of the small man, and to the detriment of the public generally. As Mr. Hougham said, "When the giants are contending, the little fellow gets trampled underfoot." Price maintenance became generally applied because, as we have seen, it is the only method yet devised by which the little fellow can get protection against the giants. It is all very well for Mr. Fred McGregor, or anyone else, to sneer at the little corner merchant and say he is uneconomic, and callously condemn his distinction-along with the veteran and all others who are just. getting established, because they are weak- just for the sake of some economic theory. But responsible legislatures cannot, or should not, behave in that way.
Yet that is exactly what we are being asked to do in this bill-without sufficient evidence, without adequate consideration, without having given them a fair hearing.
It may be that there are valid objections to price maintenance being left exclusively in the hands of private individuals. But I emphasize the point that it is a protective device, to protect the small legitimate trader and operator against the unfair competition of the strong. As such, it is nonsense to condemn it out of hand as running counter to the private enterprise system. For many years now our efforts-the efforts of the combines act itself-have been to devise laws which will protect the individual and the public generally against the unfair practices of strong combines and monopolies. Restrictions on unfair competitive practices have been one feature of this process. Agricultural organizations, labour unions and others have all pressed for-and received-laws which enable them to organize to protect the weaker individual member against unfair competition from the strong, whether that competition comes from within or without. The retail merchant has done the same thing, not by laws, but by working out the price maintenance system.
And so we say it may be that some form of public protection should be substituted for the private system of price maintenance. The fair trade laws of the United States are an example which we think this house should study and consider, and so do the retailers. But do not take a theoretical position about price maintenance, unsupported by any factual evidence, and throw the retailers to

Combines Investigation Act the wolves of unfair competition by eliminating this protection without substituting any other. In the words of Mr. Hougham, at page 768 of the proceedings:
Then I enter at this stage a most earnest plea to you as a committee and to this government, not to throw the baby out the window with the bath. If you are determined to get rid of this principle then at least give these people some protection against the thing which they fear most, and don't do one without the other.
It is because this bill would do one without the other that we urge the government now, as we did in the committee, to give the house and parliament time to look into the facts of this situation and to devise some effective means of protecting the small retailer. I therefore move seconded by the member for Eglinton (Mr. Fleming):
That this bill be not now read a second time, but that it be read a second time this day six months hence.


Major James William Coldwell: I do
not propose to join what but for the rules of the house would become a marathon, Mr. Speaker. I am not saying that in any disrespectful way of either the Minister of Justice (Mr. Garson) or the hon. member who has just taken his seat. Fortunately the rules of the house prevent all other members of this house from engaging in what might otherwise become a marathon. This problem is a difficult problem. It is a problem which has been investigated recently by a committee of this parliament, and it has been investigated over and over again in the United States. It has been the subject of a recent white paper in Great Britain, and is a problem which faces all the legislatures of our various democratic countries. We are no exception in having to face it now.
Resale price maintenance is, of course, a method by which prices are maintained irrespective of the conditions under which the articles are sold. A short time ago I was reading a work on distribution and resale by Professor Henry Smith, the vice-principal of Ruskin college, Oxford. His views have been summarized in a pamphlet published by the Fabian society in Great Britain. I think at the outset of my remarks I shall put a cogent paragraph from that pamphlet on the record. It reads:
If all the shops in the trade, irrespective of their cost of doing business, charge the same protected price, then the price cutter may build up a fictitious reputation for cheapness on the strength of cutting the price of protected goods while he overcharges on others. But it is the system of price maintenance which creates the problem: abolish it and the piratical price cutter (if he is a pirate) will be disarmed.
The evils of the system are twofold. When prices and margins are fixed by manufacturers in association with retailers the two may well be sharing


an abnormally high level of profit. Even when this does not take place, the price which the village or suburban shopkeeper must obtain to cover his expenses is higher than the urban trader needs. Thus either the more favourably placed retailer makes more profit than is necessary, or too many shops come into operation in the centres of population, thus lowering the turnover, putting up the costs, and reducing the profit of others. Profits are reduced, but the consumer is not assisted and manpower is wasted.
I think in a few words Professor Smith places the problem in its proper perspective.
The legislation now before the house is the result of a report of a special committee established by this House of Commons in co-operation with the other place. The immediate cause of the establishment of that committee, as has been said both by the Minister of Justice (Mr. Garson) and by the hon. member for Kamloops (Mr. Fulton) was of course the notification to this house by the government in the speech from the throne that an interim report of the MacQuarrie committee had been received. After studying the combines legislation that committee recommended that suppliers should be prohibited from requiring or inducing distributors to resell goods at fixed or minimum resale prices. In its report the MacQuarrie committee remarked that resale price maintenance had been noted on many occasions during investigations by the combines investigation commission, but usually those notations were made in conjunction with and incidental to investigations of other practices.
There was one investigation in 1927 in which this practice was the sole topic under discussion, and I believe that was an inquiry into the proprietary articles and trade association regulations. Hon. members will recollect that as a result of that inquiry the association was disbanded when the commissioner reported that the public interest was detrimentally affected by that association. May I say that this was also the conclusion reached in other investigations which dealt with certain aspects of the problem; tobacco in 1938; dental supplies in 1947; optical goods in 1948, and bread in western Canada. Consequently, the legislation comes before us as a result of a number of investigations and reports made under the Combines Investigation Act. In other words, it is not before us as a means of preventing increases in the already high cost of living. I do not think it will have a great effect on that. It may have a slight effect, but in any event it is rather an attempt by government and by parliament to deal with something which, from time to time, has been stated to be detrimental to the public interest. It is for that reason the legislation is before us.

Evidence concerning this practice was noted by the royal commission on prices in 1949. Hon. members will recall that commission was a continuance of an investigation started under a special committee of this parliament. This is what that commission stated at page 28 of volume 1 of its report:
Resale price maintenance, like other forms of restrictive practices, does offer what appears to the manufacturer and distributor to be a happy relief from the unending struggle against the harsh correctives of the free market system.
In other words, if we are living under a free enterprise system there are supposed to be certain correctives inherent in that system- I do not always agree that they are there but they are said to be there, and this is an attempt to get around the correctives that are said to be inherent in the system of free enterprise, which my hon. friends all over the house allege from time to time that they support.


Mr. Brooks:: Did you ever look for them?


Major James William Coldwell: We are living in North America, in an area where free competition and free enterprise are said to be the fundamental principles of our economic life-


Solon Earl Low: They should be, anyway.


Major James William Coldwell: -to the extent that when price controls by parliament and under the authority of this parliament or of the legislatures of the country were in effect, the same manufacturers and many but not all of the distributors protested and protested; and so successfully did they do so that finally the government-shall I put it this way, though perhaps some may think I should not do so- bowed to the insistent demands from my hon. friends of the Progressive Conservative party as well as of the manufacturers and some distributors that all control should be abolished. In other words, the enforcement of price control by public bodies was distasteful to those who today are making a protest against this bill which is designed to make illegal the practice of resale price maintenance or a form of price control by private manufacturers and distributors. I think we should keep this fact clearly in mind when we are discussing this problem.
But indeed it goes further than that. In the evidence before this committee and in the evidence before the commissioner under the Combines Investigation Act on many occasions, it has been shown that manufacturers have taken effective steps to enforce what is in effect a "code of law", a code of private law. It has established a private system of law which allows no appeal to any court of justice. I submit-and I think all hon. members will agree with me-that if we are to have in this country any code of law of any
Combines Investigation Act
description, whether that code of law governs prices or otherwise, it should be enacted by legislation of this parliament or of the legislatures of the country, and should be enforced by some public authority.


James MacKerras Macdonnell: Will the hon. gentleman permit a question on the matter of private law?


Major James William Coldwell: Yes.


James MacKerras Macdonnell: Is it not true that what it really is is something in the nature of a contract and that in fact it has been questioned and litigated in the courts frequently?


Major James William Coldwell: In my opinion, it is a code.


Mr. Browne (St. John's West):: A code?


Major James William Coldwell: A code; it is a code of law. It is true that persons agree to abide by that code of law laid down by the manufacturers; but because they agree to observe that code does not make it any less a code of law, in effect; and there is no appeal to the courts.
Let me point out that quite recently, in relation to other private interests in this country, a regulatory body, the C.B.C., set up by and operated under a statute enacted by this parliament, was limited by the legislation that was passed as to what it might do since in that legislation we provided that the person regulated might appeal to the exchequer court for a decision.


Donald Methuen Fleming: Only on questions of law.


Major James William Coldwell: Only on questions of law, yes. I say that what the manufacturers are enforcing is a private code of law. My hon. friend, if he likes, can discuss that point a little later.
Surely it follows, in any event, that this parliament cannot allow private manufacturers to establish a code of law from which there is no appeal either by the retailer or, what is more important, by the consumer. This, Mr. Speaker, seems to me to be the issue the Minister of Justice (Mr. Garson) put before us yesterday when he was referring to the principle upon which the MacQuarrie committee based its conclusion that resale price maintenance should be forbidden. As reported at page 2092 of Hansard he said this:
That the practice of resale price maintenance establishes a private system of law under which the business of a non-conforming retailer or of a retailer who is merely believed to be non-conforming may be seriously prejudiced without that retailer having any recourse to the courts of justice.
I want to press that point just one step further and say that in reality that is the real issue in connection with this legislation now before us.

Combines Investigation Act
The recent hearings before the parliamentary committee had more than passing significance to the people of Canada. That is obvious from the manner in which the proceedings have been quoted. No one appearing on behalf of those opposed to this bill supported free enterprise which, under other circumstances, they so loudly acclaim. On the contrary, manufacturers demanded not only the right but the support of this parliament- because if we now did not do anything in regard to legislation, it would go all across the country that we were more or less in favour of resale price maintenance-for their own private controls over segments of the Canadian economy.
I want to say at once that I can understand the attitude of many of the retailers and the organizations representing them which appeared before the committee. They remember the disastrous experiences in the 1930's when business was stagnant and when price cutting was quite prevalent. They had-perhaps I should say "they have"-good reason to fear a similar situation; but it is certain that if a similar situation occurred, price maintenance by private interests could not be enforced. It could not be enforced in the 1930's. It could not be enforced under similar circumstances should they arrive again in 1954 or 1960. It seems to me that they advance an argument which is quite unsound. Indeed, rival manufacturers would do exactly as they did in the 1930's, namely, compete with each other for the small amount of business retail merchants were likely to give them.
Thus, in reality, price maintenance as a protection in such circumstances seems to me to be quite useless. It may be true that price maintenance does not affect a large range of retail goods, with the exception perhaps of druggists' supplies.
In this connection, may I say that at page 137 of the proceedings of the committee, Mr. J. W. Preston, secretary-manager of the Canadian Pharmaceutical Association, was examined by Mr. Phelan. Mr. Phelan quoted an item from the association publication, in its issue of November 1, which said this:
From the time the speech from the throne was published and the newspaper stories started to appear, every druggist in Canada could see the disastrous results of any legislation for him: over 60 per cent of his volume is done on price-maintained products.
With that statement in this journal Mr. Preston substantially agreed. In his brief Mr. Preston gave some idea of how widespread the practice was. It was so widespread, indeed, that I think one might say that, as far as this particular type of business is concerned, the retail merchant is no longer an

independent retail merchant but that he is merely an agent for certain manufacturers.


George Alexander Drew: One o'clock.


Major James William Coldwell: Mr. Preston said this:
It is our contention that the principle of resale price maintenance is so woven into the fabric of our economy that any move to declare the practice illegal should not be made hastily, nor without scientific investigation.
We have had a number of investigations. And what did Mr. Preston say-that the retailer was the principal consideration in this respect? No, as a matter of fact he said that the protection of the manufacturer was the basic purpose of price maintenance-not the retailer, but the manufacturer. Examples were given at page 139 of the official evidence that increased profit margins on certain proprietary medicines had been announced and had been put into effect. From the evidence on these pages it would appear that druggists, as I have already said, have become very largely the agents of manufacturers.
Now I want to say immediately that I can understand the position taken by many of the local druggists who have approached their members of parliament and asked them to oppose this legislation. I have no doubt all members of parliament have been approached by some of the retail druggists in the country. These druggists quite often operate in small local communities where they meet a real community need and perform a useful and desirable service. They are afraid that if resale price maintenance is made unlawful, they will not be able to compete with large organizations in the large centres who sell through catalogues or chain organizations, and who buy in large quantities. There is no question that this has prompted many of the representations made to members of parliament.
As I said when reference of this matter to the committee was under discussion in the house, the bill should contain some provisions to prevent unfair competition. The MacQuarrie report itself draws attention to the unfair practice of advertising what are sometimes known as loss leaders. My hon. friend from Kamloops (Mr. Fulton) referred to this at some length this morning. The MacQuarrie report states, in this connection:
Resale price maintenance, by prohibiting any normal price reduction, affords an effective protection against loss leaders in the field of price-maintained goods. However, the committee does not think that to withdraw from the retailer the right to make any price reduction is a satisfactory way of preventing unfair and excessive pricecutting. We are of the opinion that more direct and desirable weapons can be found to curb loss leaders.

I shall not be able to finish what I have to say before the luncheon recess.


Agar Rodney Adamson: I did not wish to interrupt
the hon. member, but I would point out to him that resale price maintenance is appealable in the courts. There is a case in Montreal concerning a druggist who has lodged an appeal against the action of the Frosst Company. I believe that case is before the courts.


Major James William Coldwell: Yes, but it is not provided for by price maintenance.


Agar Rodney Adamson: But that action may be taken.


Major James William Coldwell: The	consumer	has	no
recourse to the courts.


James Sinclair: That is important.


Major James William Coldwell: The	consumer	has	no
recourse to the law; that is the point.
At one o'clock the house took recess.
The house resumed at 2.30 p.m.


Major James William Coldwell: Mr. Speaker, when the house rose for lunch I was saying that we regretted that the bill did not include some provision to give some protection to the retailer in regard to matters I was talking about, namely, price cutting, loss leadership and so on. According to the transcript of evidence of proceedings before the committee the hon. member for Spadina (Mr. Croll) moved the following motion:
1. That no dealer shall sell or offer for sale directly or indirectly any commodity at a price less than 5 per cent above cost.
Then the motion provided exceptions in the case of sales of damaged goods, goods sold for charitable purposes or by relief agencies, perishable merchandise, goods sold in clearance sales or as bankrupt stock; and the cost was defined as the invoice cost to a bona fide dealer or the replacement cost; and so on. I am not at all sure that the 5 per cent is the percentage that should be included, but the idea behind that motion was one that I think deserved more consideration than it received and some such provision might well be included in this legislation.
As the hon. member for Kamloops (Mr. Fulton) said this morning, there is legislation concerning this practice in some 45 of the 48 states of the United States. Evidence in this regard may be found at page 688 where Mr. Phelan was examining Mr. Leach, as hon. members who were on the committee will remember. 1 quote from that page:
Q. Mr. Leach, you spoke about the fair trade law in the United States; would you be good enough, if
Combines Investigation Act you can, to outline to us what it is, how it works in the United States, and so on?
A. To the best of my knowledge, as I think I did explain earlier-I will try to be as brief as I can- the manufacturer submits his catalogue of prices to the state fair trade board, whatever it is called; that board approves of those prices if they feel they are right and then it issues a certificate and puts its O.K. on it and- says that is your price. You will go to the retailer and he signs a contract that he will sell at that price.
After a little further explanation there is another question and answer as follows:
Q. Now, in the United States, does that eliminate the question of the loss leader? I take it it does.
A. In cases where the retailer actually signs.
Q. But here in Canada do you think this would be an effective answer to the threat of the loss leader?
A. Most effective.
Much depends on the intent and spirit of the legislation under which such a provision operates and the board under which it would operate. In some states the legislation and the personnel of the board are such that it has not as much effect as we would desire it to have under our legislation. I have been reading some articles dealing with this provision in the United States and they point out that in many states, particularly California, it has had an effect the opposite of that which was originally intended. As a rule the legislation provides purely for voluntary agreements; there are no compulsory features and no penalties. Our legislation should be a part of and in the spirit of the Combines Investigation Act. Otherwise the cure might indeed be worse than the disease. I think we should be most careful about what we de in that direction.
Another practice which should be scrutinized and as far as possible banned is the giving of different rates of discount to large and small retailers. Mr. McGregor in his evidence gave examples of how this operates obviously against the small merchant and the consumer. He pointed out that under resale price maintenance this might very well tend to keep prices up because inducements offered to buy in larger quantities were not to benefit the consumers but to maintain larger margins and bigger profits. That was the evidence placed before the committee.
I would point out that in connection with the marketing of wheat under the government board and our legislation it does not matter whether one buys a bushel or one million bushels, the price per unit is exactly the same. In my own province of Saskatchewan the same thing applies to the fur marketing board. A man who has a few pelts sends them down to the marketing agency and he gets exactly the same price per pelt for the same grade as the producer who sends in, one thousand pelts. In other

Combines Investigation Act words, the unit cost to the retailer should be the same, instead of having these differentials which are brought about by means of discounts.
It was brought out in the evidence that the manufacturer did everything in his power to persuade merchants to maintain the agreed resale prices. This morning an hon,. member raised the question of a lawsuit in Montreal. I have only a very hazy idea of that lawsuit, but my understanding is that an effort was made to obtain an injunction to prevent a large wholesale drug firm from refusing to supply a retail merchant. It had nothing to do with the community; it was purely a matter between a retailer and manufacturer. What was actually happening was that a druggist wished to again get supplies on the basis of maintaining the resale price. Consequently it has no bearing on the discussion that we are having at the present time nor does it take away in any respect from my argument that what is really happening in Canada is that the manufacturers are taking to themselves the power to impose their own code of law and their own penalties in connection with the enforcement of that code. On the contrary it reinforces it.
In its report the parliamentary committee stated that it did not think that under present conditions there was any likelihood of any powerful retailing interests engaging in a policy of selling goods at unreasonably low prices for the purpose of destroying the independent retailer.
As a matter of fact, as the Minister of Justice (Mr. Garson) pointed out yesterday, we have in section 498A of our Criminal Code a provision which, if vigorously enforced and if the evidence could be obtained, would prevent that kind of discrimination. This section has been placed on the record already by the minister and by the hon. member for Kamloops. Therefore since my time is limited I shall omit placing it on the record again. But this provision in the Criminal Code, 498A, does not meet the point made by the MacQuarrie committee with regard to loss leaders, nor does it obviate the necessity for a provision similar to that moved by the hon. member for Spadina or, as I have said, the kind of provision that in the light of our circumstances will provide the same public control as some legislatures attempted to institute in the interests of the consumers and failed to do in many of the states of the United States.
My criticism of the report of the committee therefore is that it did not recommend legislation of this description. I believe if the bill is passed the combines commissioner should be asked to draft a suitable clause for


presentation to the house early in the next session of parliament. I believe that during the recess further consideration should be given to this matter. It is true, as the committee states, that there is not much present danger of loss leaders menacing the small merchant when the economy is as buoyant as it is at the present time and we are in a period of inflated price levels.
The hon. member for Kamloops (Mr. Fulton) made much this morning of the representations made by Mr. Bengough on behalf of the Trades and Labour Congress of Canada, but what he actually did of course was to quote from their brief various paragraphs in which Mr. Bengough argued pro and con. But the meat of the brief, as usual of course, can be found in the recommendations contained therein which make a very material difference to my hon. friend's argument. Let me put on the record what the recommendations were. They are found at page 382. Perhaps I should read the preceding paragraphs, although it will be a little long. They read as follows:
What we should all be concerned about at this time is how to protect the individual whether he be consumer or merchant, distributor or manufacturer, worker or employer in a free economy. At the same time we must remember that a free economy does not exist because of some law; it exists1 because of the private arrangements, agreements, alliances, organizations and the whole welter of checks and balances which serve to offset any possibility of one group dominating it completely.
There are those who fear the domination of the economy by the state. Whatever grounds they may have for such alarm, it must be noted that the state already has a hand in the economy. Your committee is asked to consider what further hand the state shall take in the economy. What appears most important is not whether the state shall play a part in the economy or whether the economy will remain free if it does, but what part the state shall play; and whether the state shall play a negative and confusing role or a positive one.
While we would not recommend the repeal of the Combines Investigation Act, we believe that the negative approach of this type of legislation and administrative practice is unlikely to ever have very substantial influences upon consumer prices or to provide very effective means for reducing the private alliances that restrict the free flow of goods and services in a free economy.
What he is saying there is that there are restrictive alliances that do prevent the operation of a free economy and that '*something else than preventive legislation should be undertaken. He goes on to say:
We believe, on the other hand, that your committee should recommend positive measures for dealing with restrictive practices in our economy and in so doing provide parliament with suggestions for immediate action against inflation and rising consumer prices. Rather than say that a manufacturer may not make an arrangement to protect the price of his goods and thereby, presumably, his business, it would seem much more practical to suggest that the relationshiDS between suppliers

and distributors should be subject to broad social regulation thereby providing for the protection of both along with the consumer.
We suggest that your committee recommend the creation of a consumers price control board which will have power to deal with all aspects of this problem of resale price maintenance as well as with consumer prices generally. We make this recommendation to you because we believe that it would provide for a positive approach to the problem of restrictive practices in the economy and at the same time for a sensible and immediate attack on rising consumer prices in all lines.
Parliament has already granted the power to the government to deal with prices. Your committee, in our opinion should recommend that action be reserved along the negative lines of amending the Combines Investigation Act and rather that immediate positive action be taken through a consumers price control board to free the whole economy from restrictive price practices whether these arise as the result of agreements or arrangements or simply from the customs of the trade.
If you read that you see what Mr. Ben-gough was really asking for. He was really asking for some control of the economy and that that control should be exercised through powers given to a board representing the consumers of this country. That puts a very different light on the brief than the isolated quotations which my hon. friend put on the record this morning. We think this is a suggestion which is more worthy of consideration than any other, and much more indeed than the committee seemed to give it. Mention of the trades and labour congress reminds me that an argument sometimes used to support resale price maintenance is that farmers and labour maintain the prices of agricultural products and of wage levels. These of course are analogies which do not bear examination. Prices of farm goods are set not by any private arrangement but by public authority-


Edmund Davie Fulton: They are in the case of B. C. apples.


Major James William Coldwell: -namely, this parliament, or under legislation passed by a legislature or through marketing boards established by our legislatures as in B. C. Marketing boards are established by legislation with powers granted to them by the legislatures. Prices and marketing conditions, when arrived at, are the result of public negotiation, and in connection with wheat are governed largely by international agreement among governmental bodies.


Edmund Davie Fulton: Not with apples.


Major James William Coldwell: The same applies to labour. Boards of conciliation are established and the final decision may be made, as it was in the case of the railway workers just over a year ago, by this parliament, or, with respect to some other labour matters coming under provincial jurisdiction, by provincial authorities and legislatures. Neither farmers nor workers have the right to set their own 94699-136
Combines Investigation Act rates and prices apart from methods and means laid down and supervised by the elected representatives of the people.
In the case of resale maintenance, however, manufacturers arrogate to themselves the right to establish a private code of law and, indeed, to enforce it. We do not believe that is good, and we shall vote of course against the motion to give the bill the six months hoist. The effect of that would be to kill the bill. It is a method of preventing further discussion and thereby defeating it.


Edmund Davie Fulton: It could be brought up next session.


Major James William Coldwell: When that amendment is disposed of, as I imagine it will be, I shall take the opportunity to move in a very few words another amendment, namely, that Bill No. 36 be not now read a second time but that it be resolved that in the opinion of this house consideration should be given to the introduction of legislation providing that where regulation of resale price maintenance is in the public interest such regulation should be under public control instead of under private control. When the opportunity arises I propose to place our position on the record of the house in those words. I said if and when the amendment already moved has been dealt with, that is to say, if it is defeated. If it carries there will be no opportunity to move a further amendment. If our amendment carries we shall be very happy about it; but if it should not-and I hope it will carry-we shall support the bill at this stage because we believe that it is against the interests of the Canadian public, Canadian consumers, the Canadian people generally that any group should be allowed to arrogate to itself authority which should only be exercised by a body under parliamentary or legislative control. That is the principle in the bill. It is the principle of the bill which we support; and, if the Progressive Conservative amendment is defeated, after ours has been moved I hope it will carry. Should it not carry, then we shall support the bill because we think that no good purpose could be served by defeating a bill of this description at this time.
At the same time we urge that the suggestion made for the establishment of a public price control board be given consideration by the government, and that, in any event, whether it is favourably considered or not, the commissioner under the Combines Investigation Act be asked to submit to the government a draft amendment to this bill for consideration and submission to this house at the next session, prohibiting unfair trade practices such as the advertising of loss leaders and selling below cost, thus giving

Combines Investigation Act more adequate protection to the small retailer who of course, and I can understand it, is legitimately concerned at what may be, he thinks, the effect of this bill upon him. I think that is a legitimate concern which the retailer has, and I would just like to say this. I do not want the issue to be confused by anyone rising in his place in the house and saying: Well, of course the C.C.F. support this and have moved what we have moved because we are in favour of nationalization of all the distributive agencies of the country. We are not, and never have been. I should like to put these few words on the record. Again I am quoting from Professor Henry Smith. He says this:
For the present, and indeed for a long time to come, nationalization of the distributive trades would be undesirable.
We have always said that; but we have also said this-and my hon. friends on the government side and on the opposition side probably will not agree with me in the words again of Professor Smith:
The consumer can be protected against excessive overcharge by maximum price control, though this cannot be used as a major Instrument to bring about efficiency in distribution. Consequently, all the time that purchasing power runs ahead of supplies and wherever monopoly exists, great care should be taken in relaxing price control.
Then he goes on:
But let us be realists; no one knows quite what can be done in this held; till we know more let us hang on to price controls, which obviously save us from the worst, until authoritative experiment makes clear what should be done.
I should like to put this concluding paragraph on the record because it has a direct bearing, more so than what I have read, on the issue before us:
Competition in the distributive trades appears to work somewhat wastefully, in that it often takes the form of bidding up cost, or the opening of superfluous shops. Licensing would not remedy the situation; the best way out seems to lie in improving the quality of competition, and increasing its intensity, particularly in the field of price competition. The institution of a public authority to advise the consumer on prices and qualities, the general development of education, and the abolition of resale price maintenance should also operate in this direction. In particular, the action of trade associations in operating "stop lists" in this connection, and the denial of supplies to co-operative societies, should be prohibited.
As I said the other day, I remember when the agricultural implement inquiry was on, the president of the International Harvester Company was asked if he would supply his line of machinery to co-operatives and he gave a reply which could only be interpreted as no, although it was hedged around with a few considerations, on the ground that a co-operative giving a patronage dividend would in effect be selling below the resale
fMr. Coldwell.l

price at which the International Harvester Company expected its agents to sell. Then I go on and quote one more sentence:
Consideration should be given to a possible measure placing producers under obligation to sell at their customary wholesale prices to anyone willing to buy under the normal wholesale purchase conditions regarding bulk and delivery.
Because of the attention we have given to this matter, Mr. Speaker, and the considerations which I have outlined, we shall oppose the amendment of the Progressive Conservatives, which would simply defeat the bill and set it aside. We shall try to get our view before the house and get it accepted by the house. If the house does not accept our amendment, then we shall vote for the bill.


Solon Earl Low: Mr. Speaker, at the outset I should like to review briefly some facts concerning the bill that is now before the house, and particularly the background which led up to the bill. In the first place, the government appointed the MacQuarrie committee in June, 1950, to undertake the study of existing combine legislation. In early September, 1951, the Minister of Justice (Mr. Garson) requested from the committee an early report on resale price maintenance. This report, while it was designated as interim, was such only in the sense that the entire report on the combines was not completed. I think the Minister of Justice has quite fully established this fact, and I take it therefore that as far as resale price maintenance is concerned the MacQuarrie committee report was final and complete.
The second fact is this. The MacQuarrie committee in its report dated October 1, 1951, recommended legislation designed to prohibit the practice of resale price maintenance. They also recommended that the legislation to make it an offence for manufacturers to refuse to supply retailers with goods on the ground that these retailers had cut prices be enacted. The third fact is as follows: It has been established quite amply, I suggest, that the government accepted the MacQuarrie committee's recommendation. The Prime Minister (Mr. St. Laurent) announced in the speech from the throne at the opening of this present session that legislation to carry out the recommendation would be introduced during the present session. Later on it was announced by the government that a joint parliamentary committee would be set up to deal with the recommendation of the MacQuarrie committee.
The Minister of Justice gave as his reason for the committee the fact that representations had been received from manufacturers and retailers urging the government to hear their views before proceeding to have parliament enact any legislation. If there is any

criticism on this point-and I think there is- it is that the government did not get the committee under way as soon as they could have done, and as soon as it was necessary. Had the committee been set up earlier in the session, then perhaps it would have been possible to hear a great deal more evidence than was heard in the comparatively short time that it sat. I think that 16 sittings of the committee to hear 42 briefs and to scan and consider a large volume of wires and letters would hardly be enough time to give the kind of consideration that ought to have been given to expect hon. members to reach sound conclusions as to the various arguments that were put forward on all sides. In my judgment neither was there time for the government and the supporters of the bill completely to justify the legislation which the government has decided to adopt.
The fourth fact is this. As a consequence of the committee's deliberations at least four facts have been established so far as my thinking is concerned. I would like to set them out briefly at this point. The first is: The MacQuarrie committee apparently did not accumulate statistical evidence that would establish that under resale price maintenance Canadian consumers were being harmed. As far as I can gather from the evidence-and I must say here that I was not a member of the committee-the approach seemed to be more from the standpoint of principle than from detailed evidence.
Now, the second of these four facts that were established by the committee's deliberations is this. None of the trade associations which appeared before the parliamentary committee could go beyond expressing their opinion on the subject. I stress that word "opinion." It is true that certain statistical information was presented but it was found impossible, on the basis of what was before the committee, to make a proper comparison between the resale prices on price-maintained goods and, those of comparable nonprice-maintained goods. The argument was frequently advanced during the sittings of the committee that, generally speaking, maintained prices were lower than non-maintained prices. This basis was, in fact, not proven because the committee did not take the time to accumulate information upon which a proper comparison could be made. I think the opposition has some legitimate criticism to make on this score, although the Minister of Justice (Mr. Gar son) did present considerable evidence to show that at least in other countries the endi price of price-maintained goods was somewhat higher than the end price of non-price-maintained goods.
Combines Investigation Act No real effort was made, however, to establish the facts of the situation right here in Canada, and I think that is regrettable.
The member for Kamloops (Mr. Fulton) has complained that the committee actually choked off attempts by the opposition members of the committee to gather information which would establish, one way or the other, what the effect of resale price maintenance really is. The hon. member now interpolates that it was the government that choked off those attempts. If the hon. member's statements are correct, then the government is to be severely criticized for not having taken the time or made the effort to establish the facts.
Fact No. 3, which has emerged as a result of the sittings of the committee, is that spokesmen of certain trade organizations argued that price maintenance was designed for the protection of the retailer; others were perfectly frank in asserting it was designed to protect the manufacturer. What studies I have been able to give this particular problem, together with the evidence submitted by the Minister of Justice in his submission last evening, has led me to the conclusion that the principal purpose of resale price maintenance has been to protect the manufacturer. I cannot escape that conclusion. I confess that I may be wrong, but thus far my studies have led me to that conclusion.
Fact No. 4 is that the percentage of price maintained goods found in any store varies a great deal. In a grocery store, for example, less than one per cent of the goods are price maintained. Sixty per cent or more of the goods in drugs stores are price maintained. Jewelry, silverware and watches which make up the bulk of the goods in any jewelry store are price maintained to approximately 90 per cent. Taking these facts into consideration, and adding to them the evidence of the Minister of Justice which I thought was well documented and well supported, I have concluded that if resale price maintenance were prohibited it would not unduly affect the retailers as a whole. I have concluded too, Mr. Speaker, that it would not affect very greatly the retailers whose percentage of price maintained' goods is very low. In fact, I think it is self-evident that it would not.
It must be remembered, of course, that most retailers' establishments do handle a small volume of price maintained goods. On the other hand, if the bulk of the retailer's goods is price maintained, as long as that practice is continued I must conclude that the retailer is at the mercy of the manufacturer, who exercises the power to discontinue his supplies if he should cut prices by even- the smallest amount. It is our opinion that no retailer should be submitted to a system of

Combines Investigation Act private law from which there is no appeal to any court in the land. If I recall correctly the British report on resale price maintenance did condemn the practice on that ground1.
Those are the four facts which I believe did emerge crystal clear as a result of the deliberations of the committee. I should like to continue with my general comment. It was significant to me that most manufacturers did deny that there had been rigid enforcement of resale price maintenance. The jewelry people, for example, even went so far as to create the impression that there was no enforcement at all. If that is true, then one has to ask, Why do they display such concern over the abolition of the practice? Most manufacturers stressed the value to the public of branded goods. They argued during the sittings of the committee that the only way by which branded names and branded goods could be continued with assurance of quality was through the maintenance of price. Now, sir, I sought diligently for the facts which would establish the validity of that argument in my mind, but I must confess I could not find them. Consequently, I am forced to conclude that the manufacturers' contention in this regard is at least highly questionable.
I must admit thai anyone would find it extremely difficult to -establish beyond question that resale price maintenance is on the one hand good or, on the other, evil. At least, that is the way it appears to me on the basis of the evidence that is available. I cannot overlook, however, that it is a growing practice. Let me emphasize that, that it is a growing practice. It seemed to me the Minister of Justice established that fact beyond any question last night.
I should like to refer to the evidence of Mr. F. A. McGregor, the former combines commissioner. If I recall correctly, his evidence was heard on November 28, and I shall read a paragraph to emphasize the importance of that point I have just made, that the practice of resale price maintenance is growing. Mr. McGregor says, at page 390 of the committee's proceedings:
The extension of the practice in recent years has been alarming. If it continues it will not be long before price control by manufacturers will become the rule in the distributive trade and price competition the exception, as far as branded goods are concerned. Indeed in some trades the practice has already become so general that practically none of these goods can be reduced in price without the authorization of the manufacturer. The development of such a system may be very enterprising on the part of the dealers and manufacturers, but it can hardly be described as "free enterprise" in the meaning of that term which used to be commonly accepted. Nor can it be said to have any rightful part in a competitive system, which has been recognized by parliament as a basic element in our


whole economy. The undoubted right of the public to the safeguard afforded by price competition is being supplanted to this extent and in these broadening areas, by the questionable right of manufacturers and dealers to prevent price competition in the wholesale and retail selling of their particular products. If the vital element of price competition is removed from a competitive system, what you have left is not a competitive system at all, but a price-controlled system-with prices controlled by manufacturers. In the case of resale price maintenance it is control by the manufacturers with ready acquiescence and indeed urgent advocacy on the part of a very large proportion of the dealers, whose interests it is primarily designed to protect. The minority of dealers who would prefer to maintain their independence and determine their own selling prices have no alternative but to fall in line.
I do not believe we can disregard the evidence of a man of such broad experience as Mr. McGregor has had. It has already been argued that he is a theorist, and therefore should be discounted. Let me say this, Mr. Speaker: On many occasions in this house I have heard this man quoted as if he were the most practical man in the field of combine legislation, and that argument was not confined to the government side of the house.
It appears to us that, the more and more firms adopt the device of resale price maintenance, the evil, if it can be called an evil, is bound to become apparent as time goes on, and especially in the light of the fact that manufacturers are put in such a strong position the retailers will no longer be free to carry on in any capacity other than as agents of manufacturers. My own judgment tells me that is not good. Such a contingency as that would be very harmful, both to the retailers themselves and to consumers generally. In my judgment this important matter cannot be considered properly unless one takes a long-range view, and not just a short-range view. It is very largely on that long-range view of what this thing could become that we in this group take our position.
As a matter of principle, we cannot agree that manufacturers should be allowed to exercise a law of their own. They should never be in a position to put retailers out of business to suit their whims, nor to dictate resale prices, especially when the retailer or consumer who may be deprived of these goods through the action of the manufacturer cannot go to the courts to secure justice. We would have to oppose resale price maintenance on this ground, even if no other reasons existed iat all.
Most manufacturers indicated some fear that the removal of resale price maintenance would immediately result in widespread use of the loss-leader practice. Much has been said about that matter already, and for that reason I do not intend to go into it at any length. The manufacturers assumed that

branded goods would be the first affected; and they said that large stores would likely indulge in the practice in order to squeeze out weaker opposition. It is significant, Mr. Speaker-and I should like to mention this- that the large stores opposed resale price maintenance. That is a significant fact. However, I think the Minister of Justice, in his case last evening, fairly well disposed of any fears that the manufacturers have. He showed that predatory price-cutting tactics are not only against the public interest but are also contrary to section 498A of the Criminal Code. It appears to me that the federal government has authority to take action against the practice of loss leader if that practice begins, in any way, to endanger the legitimate competition that exists or should exist between retailers. I should caution the government, of course, at this time that they will have to be on their guard against predatory price cutting by large concerns especially if, in the days ahead, we slide into a buyer's market. We have not been in one for a good many years, but it is possible that we could get into a buyer's market. More settled conditions throughout the world could quickly bring us into such a market.
In my judgment the Criminal Code should be invoked wherever and whenever necessary to protect the small merchants. If I thought that this legislation would endanger the position of the small retailers throughout this country, I would do my best to hold the bill over until a full investigation of all the evidence could be made, or I would do my best to defeat it. I should like to see made crystal clear, one way or the other, exactly what effect it will have upon the small retailers. We are much concerned about keeping retail merchants everywhere in Canada in a strong and happy position. It seems to me that, in a house like this, nobody needs to emphasize, any more than has been done, the important place that the retail merchant holds in our economy; it is an exceedingly important place. Without strong and secure retail merchants in our country we could not carry on under what is called a free economy. That is one of the reasons why we spend so much time in trying to get the government to lay down policies under which Canada can be assured a balanced economy in which there will always be effective purchasing power in the pockets of consumers sufficient to enable them to buy all of the goods and services available for sale, if they want them.
Under the kind of balanced economy we Social Crediters advocate, we think the position of the retailers would constantly be a happy and prosperous one, especially if the
Combines Investigation Act practice of predatory price cutting is prosecuted with vigour under the Combines Investigation Act and the Criminal Code, and if conditions are established wherein fair competition can be assured. We in this parliament must be sure that the small merchants and druggists of this country are not adversely affected by this legislation or by anything that we do. If, by the time of the next session of parliament, it appears that there are or will be injustices to the independent merchants as a result of what we are doing- that is, through the application of the terms of this bill-then we must be ready to amend *the act to remove the injustices or even to repeal the act.
We are thinking also of the consumer generally, Mr. Speaker. The consumer has, for too long, been the forgotten man; and it is high time that something was done for him. It is our opinion that the passing of this bill will help the consumers of Canada directly and perhaps also indirectly. But when I say that, I want it understood, Mr. Speaker, that we do not look upon the abolition of resale price maintenance as any substitute for a vigorous program of action by the government to bring down the high cost of living. I am of the opinion that the unusual circumstances surrounding the birth of this bill indicate that the government wants the people to think that it is really going out to do battle for a lower general consumer price level. We are not being fooled by that, by any means, if that really is what the government wants the people to believe. We shall continue in our efforts to press the government to take the earliest possible action to relieve the consuming public from the present unnecessarily high living costs.
I think that one of the strongest arguments put forward by the Minister of Justice in his case last night for the bill was that resale price maintenance has made it difficult to detect a manufacturers' combine that may be operating behind the practice. I think he referred to that matter at page 15 of his submission, if I remember correctly. It therefore seems to me that to get this out of the way ought to make possible more efficient, successful and vigorous administration of the Combines Investigation Act. In our judgment, this alone would be of great good to the consumers of Canada.
I should now like to say by way of conclusion, Mr. Speaker-I do not want to prolong the debate, by any means-that we find that we shall have to oppose the amendment. We think that it would be wise to pass the bill now, to give it a trial and to see what

Combines Investigation Act it can do; and then, in the light of the experience which we gain, when we come back here at the next session I think we could take whatever action would be necessary to see that justice is meted out to all sections of our society.


James Sinclair: Mr. Speaker, in opening my remarks I think I should first felicitate my colleague, the hon. member for Kamloops (Mr. Fulton), for the speech which he concluded this morning. As hon. members will recall, when he opened his remarks last night he chided the Minister of Justice (Mr. Garson) who, in presenting the government's case for the legislation, spoke for two hours and ten minutes. The hon. member himself then promptly proceeded to speak for two hours and twenty minutes.


Some hon. Members:: Oh, no.


James Sinclair: If he did not exceed that
time, then all I can say, Mr. Speaker, is that it seemed longer to those who had to listen to him.


Edmund Davie Fulton: Surely it is all right for me
to try to talk on the bill.


James Sinclair: My felicitations, Mr. Speaker, are not on the contribution that my hon. friend's speech made to this debate but rather to the debate we are going to have tomorrow on procedure, because his speech is the best argument I have ever heard for a further limitation on the time of speeches in the house.
I should like to start off by reminding hon. members that the principal purpose of this legislation now before the house is to further strengthen the Combines Investigation Act. We on this continent are all fairly familiar with the history and the story of combines legislation. With the great growth of industrial power in the United States, combines, trusts and cartels, formed by powerful groups of selfish people in order to exploit the consumer to the utmost, began to be established. President Teddy Roosevelt around the turn of the century established the first anti-combine legislation. The vicious practice of combines spread to this country and we were the second country in the world to establish, in 1925, under a Liberal government, anti-combine legislation. We have a good record with regard to the breaking up and the prosecution of these illegal combines, monopolies and cartels; in fact, we have a record second to no other nation in the world. It is true last spring there was a delay in the publication of the milling report, between the time of the report by the commissioner and the presentation in the house, because of a difference of opinion with the


wartime prices and trade board, as to what undertakings they had given the millers under wartime price control.
But in all the records of the twenty-seven investigations of the combines investigators I would recall to the attention of hon. members that there are five reports which had never been published, five investigations made under the regime of the Bennett government. There was the combine in the manufacture of radio tubes in 1931, unpublished; the manufacturing of fruit baskets in Ontario in 1932, unpublished; the distribution of coal in eastern Canada, 1933, unpublished; the manufacture of rubber footwear in Canada, 1934, unpublished, and the sale of gasoline in Ontario, 1934, unpublished.
However, for fear anyone has any doubt about our record as against that of other nations in the world, let me say that our record is second to none in the world. This matter was shown by the debate on international cartels by the United Nations economic council last summer, at which I was present. The United States is first, we are second, and the next nation in the world having legislation anything like this is Sweden, and that country in 1946 passed legislation based on ours, then Britain in 1948, although as yet they have had no investigations under their act.
For fear I am being prejudiced, let us see what one of the great leaders in the Conservative party, the man said to have the finest and clearest mind in the party, Sir David Maxwell Fyfe, had to say. He published a book for the Tory party, on monopoly, in 1948, giving the British Conservative view on it, and especially referring to legislation that the Labour government was bringing forward against monopolies. He reviewed other countries' legislation on combines, and led off with the United States and then Canada. And at page 49 he said:
Other British dominions have passed laws against trade restraints though none are as complete or effective as the Canadian law.
This is surely a real tribute to Canadian Liberal legislation. However, despite our good law and competent staff, there has been the great difficulty in connection with prosecuting combines because of securing proof. These powerful, selfish and ruthless interests who form combines to rob the consumer do not do their deeds in the public light. As Mr. McGregor said, these deeds are done by stealth, but with effective legislation and staff they can be brought to light; and he has certainly done that. However, from the start, throughout, inquiries into restrictive practices in connection with combines has run this

Combines Investigation Act
thread of resale price maintenance, often the thread which held the whole evil web together.
The first inquiry was in 1926-27 into the druggists Proprietary Articles Trade Association, the P.A.T.A. At that time there were 167 drug manufacturers, 28 wholesale druggists and 2,734 retail druggists who got together to fix the price of all drug products. And that was done for the benefit of whom? Certainly it was not done for the benefit of the consumer! And it was Mr. McGregor who smashed that P.A.T.A. in 1927. But in most investigations since that time there has again run the thread of resale price maintenance. And if hon. members wish to read of the details then I would suggest that they read the evidence of Mr. McGregor at page 390, or the brief of the Canadian Congress of Labour at page 73. They will see how resale price maintenance was connected with these various combines. It was present in the drug combine in 1926, and the tobacco combine in 1927, as it is described at page 74. Then there was again in the dental supplies combine in 1947, and optical goods combine in 1948.
Then there was again in the bread-making combine in western Canada, when they even fixed the price of bread in 1948; and there was again in the match combine of 1950-and that was the worst of the lot.
Then, further evidence along this line was given, as has been pointed out by the Minister of Justice, in the report of the royal commission on prices who found the practice of price fixing increasingly affecting prices in Canada.
Then the MacQuarrie committee was established to study and recommend methods of strengthening the Combines Investigation Act. They drew specific attention to resale price maintenance as a restrictive business practice. And in this connection I would refer the house to the letter which they sent out to all manufacturers and trade associations which appears at page 250 of the proceedings of the committee, which drew special attention to the fact that they were going to make an investigation of resale price maintenance. Paragraph 6 of this letter states:
You may recall that the royal commission on prices in their examination of restrictive business practices gave particular attention to the practice of resale price maintenance and recommended that careful study be given to this problem from the viewpoint of its effect on price competition amongst wholesalers and retailers. In view of this the committee invites comments on this particular problem as well as on the Combines Investigation Act generally. In particular, the committee would appreciate receiving extended comments on the tentative conclusion of the royal commission on prices as to the effects of the practice upon the public interest. The matter is dealt with in Vol.
I, pages 27, 28 and 41, and Vol. II, pages 256 to 259 of the report of the royal commission on prices as published by the king's printer in 1949.
So those manufacturers who have said that they had no warning that the Mac-Quarrie committee were to deal with price fixing by manufacturers were certainly not speaking the truth.
The MacQuarrie committee made their interim report to the government on resale price maintenance. The government received it and accepted it and announced in the speech from the throne that it would have legislation to implement the recommendations of that committee.
There were many objections from manufacturers and retailers, who asked for further inquiry in a public forum. Then the government, as a consequence of these representations, set up the parliamentary committee to give these people an opportunity to state publicly their objections to this legislation which would do away with resale price maintenance.
Hon. members in this House of Commons will recall the attitude of the Tory party then. Their spokesman was the hon. member for Lake Centre (Mr. Diefenbaker), and what he said can be found at page 667 of Hansard. Referring to the MacQuarrie committee he said:
That committee, composed of outstanding men, called upon all those affected, including consumers and manufacturers, to send in their briefs. Has not that committee for a year and a half importuned either directly by letter or indirectly through the press asking interested parties to produce evidence regarding resale price maintenance, a subject of more than academic interest to the members of that committee?
And then in the next column on the same page:
Is it to postpone action and procrastinate? . . . Why postpone and hold back the legislation? Why further delay?
And the very interesting thing about that speech was that it was a very powerful speech, when one listened to it. But when you read it the next morning in Hansard, away from the persuasive eloquence, you will find in it no indication whatever as to what his views are on resale price maintenance. If you remember that speech of the hon. member, you find in it nowhere any mention of where he stood in connection with price maintenance. In that respect it was similar to his speech on price control, where again he made a rousing speech but never even mentioned where he stood on price control.
Well, perhaps that is not so surprising, after all; because, after hearing the hon. member for Kamloops (Mr. Fulton) this
morning declare-and after all, he was

Combines Investigation Act speaking for his party-"We are not taking a strong position either for or against resale price maintenance"-I say, one can understand the position of the official opposition.
Of course we in the House of Commons are used to this shilly-shallying by the Tories. They twist and they turn, and they sit on the fence. We remember that they twisted and turned and skated all round the manpower situation last session. We remember that they turned sideways, and turned this way and that way on price controls, talking for them but voting against the C.C.F. motion for price controls. Then, this time they say they are neutral. They are neutral-how? They are neutral like the Irish in the last war, who picked sides. In this issue the Tories are neutral, neutral against the hard-pressed consumer of Canada and neutral for the price-fixing manufacturer.
And then what is the position of the leader of the opposition (Mr. Drew)? This is what he says as reported at page 753 of Hansard:
The government by its present action makes it clear that it does not intend to act upon the recommendations they bring forward.
Well, the legislation before us today shows that, as usual, he is wrong.
Now, when the committee was called I was elected chairman. And I wish to point this out again, in view of the comments of the hon. member for Kamloops this morning. I say I was unanimously elected chairman of the committee, and that the hon. member for Kamloops himself and the other Tories voted for me.


Some hon. Members:: Oh, oh.


James Sinclair: As chairman I had constantly in my mind the fact that the hon. member for Lake Centre had said, "This committee is to stall and delay and procrastinate a decision."


Edmund Davie Fulton: Let me say-


James Sinclair: And so I had, of course, to show the Tories that this was not so, and so as chairman I took especial pains to expedite the work of the committee in every possible way.
I was very glad to have the very effective assistance of a very able clerk in the person of Mr. Burgess who worked long hours overtime, and the assistance of the king's printer, whose men worked at night so that we could have the report of proceedings on the following day, just as we receive the Hansard report of proceedings in the house.


Edmund Davie Fulton: May I ask a question? I would like to ask what about the regard of the hon. member as to unanimous voting?


James Sinclair: If the hon. member will allow me, I say it was unanimous, if only because that on the record there is no "on division" which the Tories always bawl out when anything displeases them.


Edmund Davie Fulton: I want to point out that there is no record of any vote whatsoever. The hon. member is drawing on his imagination.


James Sinclair: The hon. member's memory is faulty, because he and all other members will recall that my election as chairman was carried unanimously. I remember because I was delighted to have his support. But though the member for Lake Centre said the government was stalling and delaying it was the hon. member and his friends who delayed and obstructed the proceedings of the committee, in calling for more and more repetitive evidence from provincial and local retailers. It was he who with a straight face suggested that the T. Eaton Company should come and produce all their records. I doubt whether even this large chamber would have held all those records, and it would have taken the members of the committee years to even thumb through them.
Finally, despite the fact that the hon. member for Lake Centre accused the government of stalling and delaying this legislation, we find it is the hon. member for Kamloops, on behalf of the Tory party, who now offers real delay by moving that this bill be postponed for six months. Today hon. members in this house can judge who is stalling and delaying.
When our committee convened, the clerk of the committee wrote to all those trade groups who had publicly stated that they had made representations before the MacQuarrie committee. He wrote to those who had written to the Minister of Justice asking for a further hearing. Through the press we gave an invitation to all groups interested to file briefs which would be studied by the committee. At first we said that we would print some of those briefs, but in the end we printed all the briefs, for the information of all members and the general public.
We decided as a matter of policy to hear further from certain groups who had raised points in their briefs requiring further explanation. We faced a problem which is faced by every committee of this house which sits on a matter of national concern, the fact that so many people want to come forward with briefs which are largely repetitious. So we decided that in the main we would hear national organizations, and would hear provincial or local organizations only when they dissented from the briefs submitted by their parent national organization. Because

we did not want to be accused of stalling and delaying we gave first preference to those who had asked for the committee to express their views against this legislation, the Retail Federation of Canada, the Canadian Manufacturers Association, the electrical manufacturers, the druggists, the jewelers, the beauty equipment manufacturers and the hardware people.
The groups which were for the legislation, the consumers, the housewives, the farmers, organized labour, very generously forbore demanding to be heard. They said they would stand on their briefs and on the evidence of Fred McGregor. They said that they would rather have legislation than be a party to stalling and delaying it. Because of these circumstances the press was filled with the story of those who were opposed to the legislation and as a result many people became utterly bewildered. The term resale price maintenance does not mean much to the man on the street. That was made quite clear by the lawyer for the hardware dealers who appeared before the committee. He said that as soon as he was appointed he went around to a lot of his friends and asked them how they felt about resale price maintenance and most of them said that they did not know what it was. Then he asked them how they felt about private price-fixing by the manufacturer and they were all against it. I think that is the attitude of the great majority of the people of Canada.
What is resale price maintenance? Resale price maintenance is the practice by which a large manufacturer tells the retailers at what price they must sell his goods so that all goods are sold at the same price by all retailers, big and small, efficient and inefficient, whether they sell for cash or whether they sell for credit. If they do not do that, then sanctions in some form are applied to bring them in line.
There is one interesting thing as far as the Combines Investigation Act is concerned. If the manufacturers get together in a back room and decide that such a retail price shall be the official price, that is obviously an illegal combine and it would be up to our efficient combines branch to commence proceedings against them. If all the retailers organized together, that would also be a combine. Because there would be more of them, it would be that much easier for our combines branch to find out. But if each manufacturer tells all his retailers at what price they are to sell, then it is easy for those manufacturers to get together informally without agreement and agree on this fixed price to the consumer. The effect on the
Combines Investigation Act consumer is the same, there is artificial fixing of prices at too high a level. That is really the case against resale price maintenance.
That is the case which was made against it in the British house. That is the case that was made against the great drug combine over there. The British have had some experience in this as this practice has developed to a much greater degree over there because of lack of legislation than in this country. There in many industries all the retailers have got together in a price fixing association. It was cases of that kind that brought about Lloyd Jacob's report; then a debate in the house; then a white paper announcing government policy against price maintenance and then a final debate in the house. I think perhaps the best evidence was given in the House of Commons by Sir Hartley Shawcross, who was then president of the board of trade, who read a letter which had been handed to him by a Conservative member of parliament. The letter reads: Dear Sir:
I am writing to ask your help and advice; what I want to know is, is it an offence to sell cheap? I bought some hand cream to retail at Is. 4d. a tube. After a while the price rose to Is. 8d. I did not raise my price. A woman bought a tube from me at Is. 4d. She had been sent in by the P.A.T. Association who reported me for not raising the price to Is. 8d. A man from the P.A.T.A. told me that unless I raised my price to Is. 8d. I would have my name placed on the P.A.T.A. stoplist and supplies would be stopped. My husband is a diabetic and unable to run my business. He is an ex-service man, 1914-18. Our seven sons served in the last war and some were wounded.
Then follows a comment which Sir Hartley Shawcross rightly considered to be inconsequential.
Needless to tell you that my husband, myself, and seven sons, and one daughter voted for you.
That is, voted Conservative.
That is the type of thing that was happening in Britain under more developed price fixing. When there were infringements of their private rules they withdrew all goods from a particular store. That is what they did in the case of this woman and they left her bankrupt against which she had no recourse at law. They also have a system of fines, they have a private code of law for those who offend against their rules, the sort of thing to which the hon. member for Rosetown-Biggar (Mr. Coldwell) referred to in his speech a little earlier.
Even here in Canada we have had organizations similar to the British P.A.T.A. We need constant vigilance to see that these evil practices are not started again. Despite the fact that we broke up the Canadian P.A.T.A., I should like to refer hon. members to the evidence given in the committee when the


Donald Methuen Fleming: You ought to be ashamed to make a statement like that.


James Sinclair: The statement is on the record, as the hon. member knows.


Donald Methuen Fleming: You are simply taking advantage of your parliamentary privilege.


James Sinclair: In this bureau of commercial interests we have P.A.T.A. all over again fixing prices and mark-ups. This witness first said the bureau had no interest in prices or mark-ups and then six instances were placed on the record to show that they had publicly boasted of a very great interest. Mr. Preston was the editor of the magazine in which those articles had occurred. Mr. McGregor said that this practice is growing. In the case of the beauty equipment manufacturers, in 1945 less than half their goods were price-maintained, but now it is over 90 per cent. In the case of the electrical appliances, it is up to 80 per cent; drugs, 60 per cent; jewelry, from nothing to 90 per cent depending on the store; hardware, the percentage is quite small, just under 8 per cent.
The Canadian Retail Federation, which represents nationally all the group of retail merchant associations, appeared before the committee at three sessions. They admitted that their views were not unanimous. As a matter of fact Mr. Harris, their representative, was asked if they represented all retailers and he said they did not. Part of the question and the answer given on page 266 was as follows:
Do those members who do not agree with your position fall into any group or any category of retailers?
A. No. They constitute both large and small retailers. I do not know them by name.
Q. Are they a particular type of retailer, such as a department store, or just retailers?
A. No, they are just quite free-wheeling retailers.
They are the sort of real free enterprisers who have made business grow in Canada. All hon. members no doubt have received letters from retailers in their own ridings on this subject. I at the beginning of this committee hearing received just eight; six from druggists, one from a grocer and one from a hardware merchant. I have sent them all the proceedings of our committee. I knew of course of these panic letters which had been sent out by trade associations who create alarm now and again to justify their existence, but I was surprised to receive only eight letters as a

result. So I wrote confidential letters to quite a number of other retailers in my riding whom I knew very well, because these letters on account of the fear of reprisals have to be in confidence as were many of the letters submitted to our committee. I asked them if they had received these alarming trade association letters, and if so, why they had not written me in protest, as directed. The answers I received can be divided into about three groups. Some of the little retailers up the coast in my riding said they did not know what resale price maintenance was all about and so didn't bother writing me. The second group said they did not care, they were always getting these panicky letters but they sold their goods for the price they could get for them. However, the third and largest group-and this is a very interesting thing- wrote me and said that they did not bother writing because they did not believe that Louis St. Laurent and the Liberal party were going to sell the small man down the river.
The retail federation in their evidence expressed great fear that the little man was going to be squeezed out by banning manufacturer's price fixing. Yet the figures of the dominion bureau of statistics put on the record by the Minister of Justice show beyond question that the little man is the most efficient retailer in Canada. The large corporation has its large overhead, its inflexible regulations and its much heavier taxes, because the Liberal government has given the small man a break and encouraged him by lower taxes. Most little stores are not companies. The owner only pays his ordinary personal income tax. When they get larger they incorporate but even then they pay only 20 per cent corporation tax on profits up to $10,000, and personal income tax as well. But the big boys, the chain stores and department stores, pay over 51 per cent corporation taxes on their profits and then personal income tax as well when these profits are paid out as dividends. That is the break which this government and the Minister of Finance have given small enterprise in Canada.
Another interesting thing is that in most retail businesses only a fraction of their trade is resale price maintained. The best example is the grocery stores. Less than one per cent of the goods in the ordinary food store are price maintained, and where are there more little men in business than in the food stores? Where are there better merchandising techniques than in the modern food store, and where is the mark-up less? They are an example of what real free trade can mean. If the little retailers are more efficient why are they worried? The reason they are worried is because of the big discounts given by
Combines Investigation Act manufacturers to large retailers. Those manufacturers who came before our committee shedding crocodile tears over the little retailers have the solution right in their hands, the solution suggested by the hon. member for Rosetown-Biggar. Let them set prices not to the consumer but to the retailer. If they sell at the same price to the big man and the little man, as does the wheat board, for example, then the little man can make the most of his extra efficiency. The remedy is in their own hands.
Then of course there was fear expressed about loss leaders. It was very interesting that loss leaders were never exactly defined for the committee by any of the witnesses before us. They were variously defined as less than the laid-down cost, less than cost plus overhead, less than cost plus the full mark-up, but one thing was established, namely, that loss leaders are the product of resale price maintenance in the great bulk of the goods on the market. The jewelers' association spokesman came before the committee and slapped down twenty-five pages of bargains out of one issue of the Toronto Star to show that there was ample opportunity for competition in the field which is not resale price-maintained, a great argument to the consumers for free trade. It is only when a uniform manufacturers' fixed price across the country is dropped by one retailer that it suddenly appears because of its uniqueness as a very attractive bargain and so becomes a loss leader.
The head of the retail federation said it was not ethical to use the profits on the sale of other goods to hammer down the price of one particular price maintained product. The question arises of course: What is the reward for efficiency? With our retailers, as with everything else, we have very efficient retailers, retailers of average efficiency and some who are not so efficient. With fixed prices how can the efficient retailer pass on to his consumers the advantage of his efficiency? That question was asked of the representative of the Canadian Manufacturers Association, and his answer, to be found at page 577 of the proceedings of the committee, was as follows:
If you are maintaining a price, as long as you do maintain that price, then the retailer can neither pass along to the consumer the benefits of his efficiency or the penalties of his inefficiency.
The hon. member for Provencher (Mr. Jutras) asked the same question of the head of the retail federation. He wanted to know how the efficient retailer can pass on to his consumers the benefits of his efficiency. The head of the retail federation answered in

Combines Investigation Act this fashion, as found at page 268 of the proceedings of the committee:
Very easily indeed, on the items which are not price-maintained. He is going to give the people that benefit.
It is apparently unethical to take profits from other lines and lower prices on resale price maintained lines. That is loss leader -ing according to the retail federation. But it is apparently quite ethical to take the excess profits of the efficient merchant under resale price maintenance and then, according to the head of the retail federation, lower the prices of those goods which are competing openly on the market without price fixing. Very curious ethics!
There was an argument advanced by one C.C.F. member-and he did not speak for his party-and by the Tory members that resale price maintenance, price-fixing by manufacturers, is just the same thing as labour unions getting together and establishing a flat rate of wages, or the same as the farm support boards setting floor prices for agricultural products. I say on behalf of the Liberal party first of all that the Liberal party has never regarded labour as a commodity to be priced like a bag of sugar or a bag of potatoes. The second thing is that the labour employer, the buyer of the service, and the labour union, the seller of the service, come face to face under government legislation-, approved either by parliament or by the legislatures where the public has an interest, and agree on the price which they are going to pay and receive for labour. If they cannot agree then we have, again through public legislation, the process of conciliation and arbitration. The same is true with farm boards where the government, whether it be the federal government or a provincial government, sets up the boards for the public, and on each of them the consumer has representation. But the manufacturer fixing prices in the back room gives the consumer no representation. If there is going to be any price fixing done, then, as the hon. member for Rosetown-Biggar said, it should be done under public legislation by the government and not by the manufacturers in back rooms.
The next point raised was the rigidity of resale price maintenance. Of course the funny thing is that resale price maintenance, which is so important to some manufacturers, was shown to us to be certainly not rigid. Let me give you some evidence. The electrical manufacturers said there was no control on the value of trade-ins and therefore the retailer who wants to give a fictitiously high value for a trade-in can do so. Seventy-five per cent of the retail electrical trade accepts

trade-ins and so by giving high trade-in values they effectively lower the manufacturer's fixed price to the consumer. At page 325 of the proceedings of the committee Mr. Longestaff of the electrical manufacturers said:
If you went into any retailer and wanted to buy an appliance he would give you 10 per cent or 15 per cent off if you did not tell anybody.


Donald Methuen Fleming: Don't forget he was a Liberal candidate in the last general election.


James Sinclair: He was a representative of the electrical manufacturers when he was here. He was not speaking as a Liberal candidate.


Donald Methuen Fleming: Nevertheless he was a Liberal candidate.


James Sinclair: The manager of the Canadian Jewellers Association said the same thing. At page 682 of the proceedings of the committee he said:
I think when a customer goes into a store the retailer will make his own arrangements with him; and if the customer says: "I want my cash discount," I think the average retailer would give it to him and not turn him away.
A little farther on he said:
If you were my cash customer and you said:	"I
want my 6 per cent cash discount," I would say that as a retailer I would be terribly stupid if I did not give it to you in spite of price maintenance. The only harm in price cutting is in the advertising of it.
I want to speak on behalf of the ordinary Canadian purchaser. We have been reared not to barter like Arabs in eastern bazaars but to go to the store and pay the price which is shown. What advantage is it to that decent person to know that under this present system of price maintenance, less honourable people can go to a jeweler and haggle and get 10 or 15 per cent reduction on resale price-maintained goods or 5 or 6 per cent discount for cash "as long as nobody knows". I want to speak too for the honest merchant who, having a contract to fix prices with the manufacturer, does not chisel by giving discounts to demanding customers "as long as nobody knows about it". That leads us to this very interesting point about Eaton's brief. We had before the committee Mr. Hougham, whom the hon. member for Kamloops (Mr. Fulton) has well described as one of the ablest witnesses to appear before the committee. When asked why Eaton's had submitted such a brief he said, as recorded at page 767 of the proceedings of the committee:
... I would think one of the reasons they are opposed to resale price maintenance is that it is not effective, it is not completely effective. In other words, in order that they might be protected themselves from price competition they would have to, and do, employ a very considerable shopping force to watch their competitors to see

that their competitors' prices are comparable with tneirs, and for that reason they do not want to be tied to a contract which binds them but does not effectively bind their competitors.
You could not go into these big stores and haggle over resale price maintenance and get a discount "provided nobody was looking." Yet these stores must compete against those who, while subscribing to price fixing, will do this, "provided nobody is looking."
The major effects of this legislation will be to strengthen the Combines Investigation Act. That is the opinion of both the past and present combines commissioners. There are two secondary effects-and I say they are secondary effects-on the cost of living. One is immediate. Free competition in this country will undoubtedly reduce some of these resale price-maintained prices, which are unduly high. It was defended of course in the committee on the ground that the resale price maintenance percentage mark-up is lower than on free trade goods. Of course one other thing was pointed out, namely, that on resale price-maintained goods the manufacturer does the advertising. In other goods the retailer has to do the advertising, and so obviously should get a bigger mark-up. But it is not percentage mark-ups that are important to the consumer; it is the price he pays. It was pointed out by many witnesses that accurate comparisons are [DOT] difficult; in the vast field of consumer goods in Canada there are so many varying stores, varying conditions of sale and varying qualities. We have, however, three good comparisons. The first one is that of the United States. It was pointed out that in the United States of America there are three free trade states and forty-five states where price maintenance is the law and so identical goods are sold under both conditions. That has been dealt with already. A very fine article appeared in the American magazine Fortune, which is not the voice of big business, but it is certainly the mirror of big business in the United States. In the issue of January, 1949, which is in the library, there was a leading article entitled: "The Not-so-fair-trade-laws." It points out, as stated by the Minister of Justice (Mr. Garson) that a comparison between Maryland and Washington, a free trade state and a nonfree trade state, showed that of 117 branded drug items 35 per cent cost about one-third less in Washington than in Maryland; 38 about a quarter less; and 29 about one-seventh less. In the druggists' own brief at page 543 they compare price-fixed Kansas and free-trade Missouri. They show Phillips' milk of magnesia, 21 cents in Missouri, 49 cents in-Kansas; Zonite, 59 cents in Missouri, 79 cents
Combines Investigation Act in Kansas; Murine, 34 cents in Missouri, 49 cents in Kansas; Bromo-Seltzer, 39 cents in Missouri, 57 cents in Kansas; Anacin, 89 cents in Missouri, 98 cents in Kansas. They point out that as a result of that the Kansas housewives, veterans and consumer organizations are on the march. Well they might be!
The second example is right here in Canada. The province of Newfoundland, before union, did not enjoy the blessing of resale price maintenance, but when they came into union they got it. And as the Newfoundland co-operative brief pointed out, the prices in every line except cars rose immediately when resale price maintenance was applied to Newfoundland and so they had a royal commission on this matter. The hon. member for Burin-Burgeo (Mr. Carter), and I hope the members of the Conservative party from St. John's as well, will speak further on this. Let me give you one example. The ordinary little ignition battery used by fishermen there before union cost the retailer 45J cents landed, and he sold it for 60 cents. After union it cost him a cent more, 46J cents, but resale price maintenance, this great benefit to the consumer, got the price up to 80 cents. That is quite a price to pay for resale price maintenance.


Mr. Fraser:: There is a sales tax on there, too.


James Sinclair: That is the landed price to
the retailer including taxes. Then here in Canada I have a comparison between goods which are exactly comparable. Professor Fuller, an expert witness for the druggists, pointed out that because of our federal drugs act all drugs must meet the same standard and that Bayer's aspirin is the same thing as salicylic acid. On Bayer's aspirin the retailer gets a 22-68 per cent mark-up, but on the same article under a non-brand name he gets a 50 per cent mark-up. That is very good, but the only trouble is that Bayer's aspirin sells for 79 cents a hundred and the same thing in the non-resale price maintained goods sells for 19 cents a hundred. The consumer could save 60 cents on that, but the consumer never has a chance because the resale price maintained goods are the goods which are on the counter for the consumer and the others are under the counter.


Donald Methuen Fleming: No evidence of that.


James Sinclair: The second effect on the cost of living of course is the long range effect. If this legislation strengthens, as Mr. McGregor says it will, as Maxwell Fyfe says it will, as Mr. MacDonald our present combines commissioner says it will, if it strengthens the Combines Investigation Act

Combines Investigation Act by making the prosecution more effective, we will be able to stop the practice of those combines whose purpose is to get higher and higher prices from the consumer, preventing new techniques and new inventions which might destroy existing products.
On this question, the greatest authority In Canada on combines, the man who has beaten them, came before this committee and said that the abolition of resale price maintenance will do just that. That man of course is Mr. McGregor, who was combines commissioner for 25 years. He was requested by the hon. member for Lake Centre (Mr. Diefenbaker) at page 670 of Hansard as follows:
Let us bring in Mr. McGregor because I am sure that if his lips are unbridled, if he comes In unhobbled by any consideration other than to help the committee, he will make some revelations that will be most interesting and I am sure most helpful in suggesting effective amendments to the net.
A little later on he said:
He is the number one man in this business if we want to get at the facts.


George Alexander Drew: Mr. Speaker, for the purpose of the record I think it is proper that it should be pointed out that the quotation that has been read with its customary clarity related to the argument that this committee should be dealing with the whole question of the combines act and not with this limited subject.


James Sinclair: The leader of the opposition as usual is wrong, because this quotation is taken from the earlier part of his remarks before he developed the theme about having a complete combines investigation. Having established this in the first part then he went into the theme about having a complete investigation.


Edmund Davie Fulton: That was the whole point.


James Sinclair: I hope you are taking note of the interruptions, Mr. Speaker.


George Harris Hees: Will the hon. member permit a question?


Mr. Speaker:: Order. The hon. member's time has almost expired.


George Alexander Drew: There is lots of time.


James Sinclair: Thank you.


Stanley Howard Knowles: Let him know.


James Sinclair: However, I want to turn-


Mr. Speaker:: My point is that the hon. member for Broadview can ask a question only with the consent of the hon. member who has the floor.


James Sinclair: I will give my consent at the end when there will be no argument about time. I will gladly say that he was the

strongest member of the Progressive Conservative party, and in the committee he was most insistent that Mr. McGregor be called before the committee. Well, Mr. McGregor came before the committee. The hon. member for Broadview was the first questioner on my list when Mr. McGregor finished his evidence. I said: "All right, Mr. Hees, have you your questions ready?", and he passed. He said "I think Mr. McGregor has answered all my questions". But that night he got back amongst his Tory colleagues and they straightened him out on that and got him back to stall and delay. The following day he then did have some questions to ask.
Let me say that no members of this house should vote on this legislation without reading the evidence of Mr. McGregor because he is certainly, as the hon. member for Lake Centre said, the number one man, and his evidence, garnered not out of academic theories, but from 25 years of fighting these great combines on behalf of the people of Canada and fighting them successfully, warrants him the hearing he got.
In the experience of the oldest committee clerk in this house, the oldest reporters in this house and the oldest members of parliament who heard his evidence through, they say that never had a more objective and more powerful brief been presented to a parliamentary committee.
Let me in conclusion turn in summary to those who are supporting this legislation. On behalf of the consumer, the man who is almost completely forgotten in all the arguments put forward by the retailer and the manufacturer, first of all the two combines commissioners, Mr. McGregor for 25 years and Mr. MacDonald for 2 years, both in their briefs, both in examination before the committee, supported this legislation as being helpful in strengthening the Combines Investigation Act; the royal commission on prices; the MacQuarrie committee; organized labour in Canada, as represented by the four great labour congresses-the Trade and Labour Congress, the Canadian Congress of Labour, the Catholic unions of Quebec and the Railway Brotherhoods-their briefs are at pages 73, 377, 546 and 551 of the proceedings; the farmers of Canada through their great voice the Canadian Federation of Agriculture. Their brief pointed out that the farmers and the fishermen are caught twice by resale price maintenance, not only as consumers but as producers. The great industries in my riding, when they buy equipment, go direct to the manufacturer and escape price fixing; but the little producer, the farmer and the fisherman, the'little fellow, goes to the retailer for his equipment to produce and the very goods he buys for his production, the tractor, the
21S3

twine, the engine for his fishing boats, his nets, and so on, are sold under resale price maintenance. Yet the farmer and fisherman must sell in the open markets of the world where there is no resale price maintenance. The housewives of Canada are for this legislation through their representatives, the National Council of Women and through the able brief of the consumers association of Canada; and the housewives of Canada really know about prices. The great co-operatives of this country who have done so much for the farming and fishing communities are for this, as are also the Saskatchewan wheat pool. All these people are for this legislation. The majority of manufacturers in Canada who do not practise resale price maintenance, who are real free enterprisers, who go out on the open markets of the world selling their goods in the face of world competition, are not for this resale price maintenance. All they want is the right to suggest prices, and the right also to enforce maximum prices so retailers cannot gouge the public in times of scarcity as they have in the past.


Mr. Speaker:: Order. The hon. member's time has expired.


George Alexander Drew: I hope that ample time will be allowed members in this debate, because it is going to continue for a long time.


Stanley Howard Knowles: On a point of order, Mr. Speaker, if we give unanimous consent to one side we shall have to give it to the other. I do not think the hon. member should continue for more than a sentence or two.


Some hon. Members:: Agreed.


Mr. Speaker:: Two minutes?


James Sinclair: The Canadian Chamber of Commerce shows a diversity of opinion, because they are the ones who have been strongest against government price control and so realize they cannot advocate private price control. At their conference in Quebec, since they were against government price fixing they could not endorse manufacturers' price fixing. Many, many of the retailers of this country giving good service to their customers are also for this legislation, and the three political parties of the people, the Liberal party, the C.C.F. party and the Social Credit party, are with them against manufacturers price fixing.
Who are against this legislation? Some retailers who were frightened by the panicky letters they received from their trade associations crying havoc anid ruin. Some retailers remember the terrible days under the Tories of 1930-35, and believe that resale price maintenance has saved them from that condition today. It is not resale price maintenance which has saved them from a return to those days, it is the great policies of the
Combines Investigation Act Liberal party since that time. These policies have caused every year since 1935 increasing employment, ever increasing social security, a better break in taxation for the little retailer and greatly increasing industrial expansion. Today as a consequence we find our currency is the second hardest in the world, the real acid test of any economy.
Who are those who are against it? A few reactionary manufacturers who have loudly proclaimed at endless board of trade meetings their allegiance to free enterprise, that is for everyone else, but who want iron-clad protection through fixed prices themselves, and that party which, since the days of the family compact, has been the historic friend of privilege, monopoly and reaction, the Tory party.


Donald Methuen Fleming: Mr. Speaker, I am sure the house has welcomed the relaxation provided by the matinee performance which has just been concluded. It was an extraordinary histrionic performance. It will not be hard for those who have any claim to open minds on this subject to realize, after the performance we have just witnessed, how utterly hopeless it was in that parliamentary committee to try to obtain a fair hearing for both sides of the question. We have had a great conglomeration of distorted references to evidence, abuse of witnesses, etc., all of which is in keeping with the sort of thing we witnessed in that committee day in and day out at the hands of the same hon. gentleman.
Now, sir, I wish to begin with the Mac-Quarrie committee report. I remind the house that that committee was appointed to study the whole Combines Investigation Act and its operations. It was not the committee's idea that it should be called upon to divorce one particular segment of the problem from the whole, and make an interim report on that. This was the government's idea. I invite hon. members to consider the circumstances under which that report was made. Let us recall that the government has been under strong attack for a long time over its failure to grapple with the problems rising in the wake of the high cost of living and inflation. Having done nothing in that direction, as a matter of fact having heaped fuel on the fires of inflation by their outrageous taxation policies, the government was looking about for some means of distracting public attention. Apparently one member of the government came up with what he was sure was a bright idea.
That hon. minister had need of a bright idea, particularly on this subject. After parliament had been summoned a hurry-up

Combines Investigation Act call was put through to the MacQuarrie committee asking that committee to bring in an interim report on this one particular subject, detached from the remainder of the considerations of the Combines Investigation Act, and so with great speed that committee wrote this report. The haste in the writing of the report is reflected in almost every line of it. It is reflected most of all, I think, in the clear departure contemplated by this report from the essential principle of the Combines Investigation Act, to which I hope to return later in my remarks. We see this report going forward to the Minister of Justice (Mr. Garson) who, as I have said, had some special reason for wanting to come up with a bright idea about the Combines Investigation Act because of the way in which he himself in 1949 had committed a flagrant and outrageous breach of that act, which breach continued for a year or more and made him the No. 1 lawbreaker in Canada. It was not thought such a bad idea, apparently, for him to come up with some proposal that would make it appear as though he were going to do something constructive under the Combines Investigation Act. The stage was carefully set on the eve of the opening of parliament.
When we look at this report from the MacQuarrie committee we see, in the first place, that it is open to two very strong criticisms. No one can read that report without concluding that it is merely a catalogue of opinions. There is no evidence in that report, and that is the first obvious weakness. Mr. McGregor said the committee had before it no statistical evidence. We do not know what they had before them or what they had not, because in this report they have not told us what evidence they had before them.
The second great weakness of this report is that it simply sidesteps the problem of loss leaders. The MacQuarrie committee recognized the formidable nature of this problem of loss leaders, and in the concluding paragraph of the report they say:
As to the "loss leader" device, the committee believes that it is a monopolistic practice which does not promote general welfare and therefore considers that it is not compatible with the public interest.
The MacQuarrie committee stopped there. They have brought forward no recommendations for coping with the formidable problem of the loss leader. They did not do so, sir, for the interesting reason which is to be found in the final sentence of the report:
. . . and the committee, therefore, does not think it imperative to make an immediate and hasty recommendation regarding that practice.
If the MacQuarrie committee would have regarded it as hasty to try to formulate some

recommendations for coping with the problem of loss leaders, then what is to be said of the way this report has been jammed through a parliamentary committee, and now the government is attempting to thrust it down our throats?
Apart from the lack of any policy to cope with this great problem of the loss leader, what weight is to be attached to this report? In cases of this kind one naturally looks with respect at the authors. One wishes to attribute to a report of this kind whatever measure of authority stands behind such individuals as compose the committee. As to the fact that one member of the committee was a judge, I think it is not unusual that the opinions of judges are subject to appeal; but when those opinions or judgments go before a court of appeal the conclusions are weighed in the light of the evidence. No member of this House of Commons can today form an intelligent judgment of the MacQuarrie committee's report because we do not know what evidence, if any, that committee had before it on which it based those conclusions.
As to the learned professors who composed the balance of the personnel of the committee, especially when hon. members like the hon. member for Spadina (Mr. Croll) invited the committee to sit down and accept without question anything that fell from the lips or pens of these eminent gentlemen, I think it is only fair to observe that anybody working under the pressure that apparently this committee was obliged to, under the direction from the government of September 10, could easily make mistakes. There is not, I think, any of these gentlemen who can claim to be infallible. I think it is only fair to observe that men working under pressure, whether of time or of an importunate and ambitious minister of the crown, can easily make mistakes.
How practical is the report? The authority of the report depends to some extent on the experience of the authors, and I think it is only fair to observe in passing that if this report has to stand on the strength of the opinion of the authorities and has no evidence to support it, then we can only observe in all fairness that none of these worthy gentlemen has had any experience in merchandising; and certainly one of them was out of the country all last summer and was quite busy when he got back to Kingston in September, and I greatly doubt if he had much time to devote to the writing of this report.
I said in the committee, and I say it in the House of Commons, that given the evidence on this important question of resale price maintenance the members of the House of

Commons, with their training, with the technique they have of applying their minds to political and economic questions, and with their experience, are just as capable of f orming an* intelligent conclusion on a question that has both economic and political aspects to it as are any members of any royal commission.
I therefore say to you, sir, that the House of Commons ought to have the evidence on this question. The House of Commons has not been given the evidence. There is not a member of this house who can claim, in making the decision which the government asks him to make, that he is making an informed decision in the light of evidence and facts. If he does so he is flying in the face of truth. The fact of the matter is-and it is crystal clear after what has happened in these recent days-that the government's minds were made up before this report was ever received. They were simply looking for an opportunity to buttress a recommendation that was being written into the throne speech. They might just as well have foregone the parliamentary committee because their minds were made up before that committee was ever appointed.
It is not unfair to comment, sir, that it was the Minister of Justice (Mr. Garson), when he was meeting the people who were coming before him with complaints, problems and protests about what the government was doing, who cooed away in their ears and said to them; "You have nothing to fear from this. Coldwell is pushing us hard for price control and we must have something that we can hold out in front of the people. This is what we are going to do. It will not hurt you. You just be quiet, and this is what we will dangle out in front of the people." That is the sort of birth this ugly child has had.


Stuart Sinclair Garson: On a question of privilege, Mr. Speaker, may I say that neither my hon. friend nor any other human being is able to adduce any shred of evidence in support of these statements that he has just libellously attributed to me.


Donald Methuen Fleming: Mr. Speaker, the hon. member for Coast-Capilano talked about evidence he had but which he did not dare bring out because of the fear of reprisals. That is the kind of evidence which I have just quoted here. I am not going to belabour the Minister of Justice because we know that he has a notoriously short memory. He forgot about a report for a whole year.
This MacQuarrie report has about it these aspects which invited the comment of the Trades and Labour Congress of Canada upon it in these words: it was a contrived argument to support a preconception.
Combines Investigation Act
What of the parliamentary committee? What of this joint committee of both houses of parliament? This was understood to be a response on the part of the government to the outcry of those who were condemned otherwise without trial; and so the offer of a trial was held out. It proved to be a pretence. The kind of hearing that was afforded to those interested, those who were condemned without trial otherwise, in that committee, I say to you, sir, would not do justice to and would not reflect credit on any parliamentary system. As a matter of fact, what is it that distinguishes our conceptions of parliamentary institutions or our ideas of justice from those currently in vogue in China or in Russia? Surely it is that we give people a fair hearing and try to arrive at a just decision. Both those features of justice were lacking in this case.
Those who came before the parliamentary committee received neither a fair hearing nor a just decision, as reflected in the report of the committee. I have been in this house long enough, sitting as an opposition member and facing a Liberal government, to know that a parliamentary committee is not like a court of law. You cannot expect the same kind of adherence to justice in a parliamentary committee dominated by a Liberal majority. Nevertheless, surely the public expects of parliamentary committees something better than the sham and travesty that was perpetrated in the name of justice and parliamentary institutions in this case in this committee, for a sham and a travesty it was.


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: There are two people who to the end of time will bear the principal responsibility before the bar of history for making out of that committee a sham, a travesty, and a miscarriage of justice. The one is the Minister of Justice (Mr. Garson); the other is the loquacious member for Coast-Capilano (Mr. Sinclair). If ever a question was prejudged before it saw the light of day or before it was referred to a parliamentary committee, it was this question. It is no better than communist procedure, surely, if the question is prejudged before the hearing even commences. The government prejudged this question, and the proceedings of this committee will ever remain a dark blot on the parliamentary processes of this country. Of all the parliamentary committees that it has been my privilege-


Stuart Sinclair Garson: On a question of privilege, Mr. Speaker, may I say that my hon. friend is making some extremely serious charges against the hon. member for Coast-Capilano



Combines Investigation Act and myself. I wonder if he will, before he takes his seat, quote any shred of evidence from the recorded proceedings of the committee in proof of those charges?


Donald Methuen Fleming: I wonder if the Minister of Justice would like me to take up some more of my time in reading long extracts from the evidence? 1 shall be glad to furnish him or any other member of the house with ample extracts to prove and buttress every statement I am making here this afternoon. Of all the parliamentary committees on which I have sat in six years in this house, this one unquestionably was the worst, in terms of the way it was handled and in terms of the way procedure was wrenched and distorted in order to serve the political ends of the government.


Mr. Lesage:: You were not there all the time.


Donald Methuen Fleming: I was there every time the committee sat except when I had to leave in order to attend another committee that was sitting simultaneously; and I addressed myself to my duties on this committee with, I think, the same conscientiousness with which I have sought to address myself to my duties on all committees on which I have sat in this house. If the hon. member for Montmagny-L'Islet (Mr. Lesage) will be honest with himself and with me he will recognize that fact.


Jean Lesage: I just said that the hon. member was not there all the tune, and he agrees.


Donald Methuen Fleming: I have just explained any short absence of mine from any meeting, and I have told the hon. member that I have made a point of closely following the evidence in this case. When I speak of the rotten injustices perpetrated in this committee-


Some hon. Members:: Oh, oh.


Donald Methuen Fleming: -by the chairman of that committee, I am speaking only of that which I saw with my own eyes, Mr. Speaker; make no mistake about that. This committee operated under the domination of the government. It was a complete sham.


James Sinclair: As chairman of the committee, I think I owe a certain obligation to the other members who were on the committee. I will discharge that obligation by pointing out that even on those days when the hon. member was there he never at any time complained about these rotten injustices of which he is now complaining.


Donald Methuen Fleming: There is not a fragment of truth in what the hon. member has said.


Stuart Sinclair Garson: On a question of privilege, I think my hon. friend should either withdraw that statement he has just made, or quote from the evidence of the committee to prove it. Either one of the two: Withdraw, or prove it.


Donald Methuen Fleming: I will not withdraw one iota of what I said. I will make my speech as I want to make it, and the Minister of Justice is not going to reconstruct my speech for me.


Stuart Sinclair Garson: If my hon. friend has no respect for his parliamentary duties, then he should have some respect for his integrity as a citizen and prove the libellous statements he makes.


George Alexander Drew: May I suggest that the minister remain quiet and wait until he has his opportunity to reply.


Mr. Speaker:: Doubtless a great deal of heat has been generated in this debate. I have allowed hon. members to express themselves freely. I did not understand the hon. member for Eglinton to accuse anybody of telling what is not true. He meant to say, I think, that it was not a fact. However, the hon. member realizes that he cannot accuse another hon. member of knowingly uttering an untruth. I did not think he did say that.


Donald Methuen Fleming: I did not use the word "wilfully". The word "untrue" is quite parliamentary. I did not use the word "false".


Stuart Sinclair Garson: My hon. friend said that two members in question were guilty of rotten injustices. I would like him to prove that from the evidence, or withdraw it.


Donald Methuen Fleming: If the minister will be good enough to sit down, after speaking for two and a half hours yesterday, he will get enough evidence of the injustices that were perpetrated.


Mr. Speaker:: I must not allow this to go on. As I say, a good deal of heat has been generated, and I did allow some expressions to go. However I suggest to the hon. member that "rotten injustices" is hardly parliamentary.


Donald Methuen Fleming: If what I have said is unparliamentary I will withdraw it, and substitute the words "gross and unseemly and unpardonable injustice."
Now, I wish to make it clear that we members of the official opposition went into that committee with an open mind on the subject. We asked that Mr. McGregor be called. You would think that Mr. McGregor had suddenly become a saint today. Perhaps the government should be reminded that it was because of the cloud this government

cast upon him that he tendered his resignation two years ago, because as a self-respecting citizen he would not submit any longer to the indignities cast upon him by this government. We of the official opposition wanted to have the evidence of Mr. McGregor, with his long experience. We make no apology for asking that he testify. Let those apologize rather who were responsible for refusing to hear other people who were entitled to appear before the parliamentary committee, and who thus prevented justice being done in the name of the Canadian people.
And, sir, the committee got under way. The prevailing idea at first was that we would preserve balance. The idea was that we would hear those in favour of resale price maintenance and also hear those against it. The hon. member for Kamloops and I sat in on the steering committee and it was decided that we would alternate the witnesses, first one opposed to price maintenance, then one favouring it, so that this committee would have a balanced presentation, and so that through the press the public would have a balanced report.
The first organization called was already on record as against resale price maintenance. I refer to the Canadian Congress of Labour. The alternating of witnesses in this manner was proceeded with for a few days, until there was a meeting of the steering committee after the first week or ten days. By that time it had become clear that we could not hope to conclude the work upon which we were embarked. The fact was clearly conceded by the representatives of the other parties present when the chairman, who was in a more responsible mood than today, said, "If we do not push this through to a conclusion at this session you fellows"-and he turned to my friend from Kamloops and myself- "will be criticizing us for not pushing it through." We said "No", that the committee could not be criticized if it did not fully accomplish what was an impossible task, at this session, although criticism could attach to the government for starting on something that had not been properly considered before it was begun, and it would have to take the responsibility and the criticism for that.
The chairman said he would talk with the minister about it, come back and make a report. That was at the end of one week. It must have been a hectic weekend in the Liberal party, because when the committee assembled at the first of the next week all was changed. We were told that this committee was going to report at this session. We were told that from that point on there would be no time to hear both sides of the question. We were told there would be no
Combines Investigation Act opportunity to appear afforded to those who had put in briefs in opposition to resale price maintenance. We were told that a deadline would be fixed for the conclusion of the hearing, and that it did not matter from that point on how much we protested-we, of the official opposition, those of us who wanted to hear both sides of the question and get all the facts-we were told it did not matter. Taking his instructions from the government, through the Minister of Justice, the chairman of the committee applied the guillotine. From that time on the chairman of the committee functioned as a guillotinist; and he did it under the direction of the Minister of Justice.
If that is justice, then we think we had better recast in this House of Commons, very soon, our idea of justice.


Stuart Sinclair Garson: On a question of privilege. Mr. Speaker, with respect to the statement that my hon. friend has just made, that I instructed the chairman of the committee as he has said: That is contrary to the fact, and I am asking him to withdraw it.


Mr. Speaker:: The hon. member must accept the minister's word.


Donald Methuen Fleming: Very well. I will accept the minister's word; I will indeed. But it amazes me just how subtle governmental influence can be. It may be that the minister, as a member of the committee, thought it was good policy that he should not personally try to exert those subtle influences. Nevertheless those subtle influences were exerted. And it was very apparent, and very rapid indeed was the reaction of the chairman of the committee. No, the government could not have asked for a better chore boy to do their job, to do their political chores, than the chairman of this committee proved himself to be. And he certainly has laid this government under a debt of gratitude to him for the way he guillotined the proceedings of the committee.
What is the result with which we are faced here? What is the result of this abuse of parliamentary proceedings, in a desperate effort to improve the political fortunes of the government, and to retrieve the political fortunes of the Minister of Justice? First, the evidence, if any, before the MacQuarrie committee was withheld from the committee. Second those who were called before the committee were not sufficiently heard. Their time, as well as the time of the individual members of the committee, was rationed. In the third place, there were many who applied to be heard and who were refused permission. Many of them represented retail interests and associations in this country. They represented retail merchants, numbering thousands of people in the ranks. Then, in addition, there

Combines Investigation Act
were those who did not appear before the committee and who did not apply for hearing because they realized the futility of it, in the light of the ruling which had been made.
Then these were the simple-minded people like myself who asked that representatives of the dominion bureau of statistics should be called before the committee so that we might have all available statistical evidence concerning this country. But that suggestion was pooh-poohed. There was not time, they said, to listen to the bureau of statistics, though we listened to the Minister of Justice yesterday reciting statistics from the bureau of statistics. Yet we were told in the committee these matters were so trivial that we should not listen to them at all.
Then there were many supporters of resale price maintenance who should have been called, but were not called. I think this house ought to know the reason we did not hear from these people supporting resale price maintenance.
We had the viewpoint of important consumer organizations, of the Canadian Congress of Labour and the Trades and Labour Congress. We could have had also representatives of some of the bigger interests in the merchandising field. The T. Eaton Company had made their position public at an early date, a position which must have given great comfort to the government. Why were not they called? We of the official opposition asked that Eaton's should be called to give their reasons. They undoubtedly would be informed reasons for supporting the proposed ban on retail price maintenance. But the committee sided with the government to apply the guillotine in order to prevent the committee from having the evidence of T. Eaton Company Limited, the largest departmental store in Canada. Our attempts in the opposition to make that committee really effective for the purpose of obtaining information were thwarted by the majority on the committee.
The hon. member for Coast-Capilano in one of his most fanciful flights today talked about obstruction on the committee. I submit that the greatest obstructionists that have ever been seen in the House of Commons were those submissive, obedient members of that committee who obeyed all the wishes of the government and obstructed the hearing by that committee of evidence bearing on this question such as any intelligent and conscientious member would want to have before being called upon to make his decision. Therefore, as far as I am concerned-


Mr. Mcllrailh:: On a point of order, surely hon. members who were not on this committee do not have to hear-


Mr. Casselman:: Go outside then.


George James McIlraith: Surely they do not have to hear a member who has become heated about this subject use terms which impute obstruction and dishonesty to his parliamentary colleagues in the House of Commons who happened to sit on the committee. He may differ as sharply as he wishes with what that committee did and with-


Gordon Knapman Fraser: Is this a question of privilege?


Mr. Speaker:: The hon. member is speaking on a point of order.


George James McIlraith: I am rising on a point of order, and I am adhering strictly to it. Surely the hon. member has not the right to impute dishonesty to his fellow colleagues. He has done that directly. I rise on a point of order to make that protest. I noted that the leader of the opposition (Mr. Drew) abused the rules a few minutes ago when he deliberately made a wrong reference in referring to another hon. member of this house. There are rules in this house, and surely they should be observed.


Edmund Davie Fulton: Why should this dissertation be allowed to take place?


George James McIlraith: I am asking the Speaker to enforce the rules of the house, and I draw to his attention that there has been a charge of dishonesty on the part of the hon. member for Eglinton in connection with his fellow members on a committee of the House of Commons.


Donald Methuen Fleming: I did not charge dishonesty.


George Alexander Drew: I should like to point out that some of us may be a little surprised that the hon. member who has just spoken has taken it on himself to advise you as to your duty, Mr. Speaker. It is for you to say whether I have abused the rules or not. I think the remarks that have been made are sheer effrontery under the circumstances.


Mr. Speaker:: If the hon. member for Eglinton has accused any hon. member of the house of dishonesty-I did not catch his expression-it would not be parliamentary and he would have to withdraw it.


Donald Methuen Fleming: I can assure you that I did not impute dishonesty to any member of the house. I did impute a great deal of deliberate obstruction in the committee by the government majority on the committee.
Therefore, for these reasons I for one cannot accept the report of the MacQuarrie committee without evidence which would enable me to test the validity of its conclusions. I am not prepared to do anything to condone the gagging of this parliamentary committee and the suppression by the majority on that committee of necessary evidence. I recognize

that this question of resale price maintenance is a very large and important question and therefore it should have careful and ample consideration. The course that has been followed here by the government in gagging the committee is calculated to prevent any fair assessment of the arguments that have been submitted.
When we are asked by hon. members, as we were by the hon. member for Coast-Capilano in his flight of oratory this afternoon, to picture resale price maintenance as being a vicious system today, I invite him to remember, because evidently his memory needs some jogging, that this practice has grown up and reached its present extent largely during the lifetime of the present government. It did so while a man was Prime Minister in this country who claimed to be the father of the Combines Investigation Act and who looked with no little favour and respect upon Mr. McGregor. I just ask hon. members of the house, before they get too far over the brink on this question, before they go too far in their denunciation of resale price maintenance, to recall that the practice grew up under the government of the late Mr. Mackenzie King, who manifested a great interest in combines. If the practice is as vicious as the hon. member for Coast-Capilano pictured it to be this afternoon, I wonder what has been going on in this house since 1935. Did we have to wait until the arrival of the Minister of Justice (Mr. Garson) in the house to come up with the discovery of this problem in all its iniquity, as it was described to us today? Is he the only man who has recognized the problem at all? Is he the only man who has been able to diagnose it and see it in its true dark light? Is he the only man who is capable of conceiving a solution? Is he the only man that has been at all on his job? If so, why was not something done from 1935 to 1949, if the facts were as they have been put before us this afternoon; and I for one say that they are not.
In view of the way hon. members opposite have helped to exhaust my time by their interruptions I am simply going to make a few assertions as to the effect of the limited evidence that was received.
First, the practice of resale price maintenance has grown up as a defence of small retailers against the pressure of big interests. It is not a practice dictated or defended by so-called big interests. Mr. McGregor made it quite clear that the practice is wanted by the retailers, rather than the manufacturers. The Minister of Justice talks about the expensive establishment, on the one hand,
Combines Investigation Act and the plain cash and carry store, on the other. He got a little bit confused. Apparently the plain cash and carry stores are the chain stores, and undoubtedly they will take great comfort from what the Minister of Justice said yesterday.
Second, the principal danger against which resale price maintenance protects the small retailer is the practice of loss leaders. It is the branded, price-maintained articles that are found most suitable for exploitation as loss leaders.
Third, the loss leader is a thoroughly vicious practice. That has been made perfectly clear by a great number of authorities.
Fourth, there is no adequate alternative protection against the loss leader. That was made abundantly clear by Mr. McGregor in his evidence. It is made abundantly clear by the way the MacQuarrie committee spoke of it. It was made abundantly clear by the hon. member for Spadina (Mr. Croll) when he submitted draft legislation on the subject which the committee did not accept as workable. Section 498A of the Criminal Code does not meet this problem of the loss leader, as Mr. Ralston and Mr. Ilsley said in their speeches on June 10, 1935.
Fifth, resale price maintenance has brought stability into the retail trades affected. In the house we have heard a great deal of talk about the necessity of orderly marketing for farmers. It would not be amiss to point out the value of orderly marketing in the retail trades.
Sixth, there is no proof that the consuming public has been hurt by resale price maintenance. On the contrary, the evidence shows that this practice has provided a guarantee of quality and has increased the number of outlets. In that way it has encouraged increased competition. Then the margin of profit is lower on branded than on nonbranded articles. Moreover the margin of profit on branded articles has risen less than on the non-branded in the sellers' market of recent years. The manufacturer sets the margin with a view to making the purchase of his product attractive to the public.
Seventh, there is no proof that the consuming public will benefit from a ban on resale price maintenance. Under that point I cite these four circumstances:
(a)	If loss leadering reduces prices of branded articles, the retailers tell us they would have to make up that loss by raising the prices on non-branded articles or go out of business, and in that way reduce competition.

Combines Investigation Act
(b)	Elimination of retail outlets means less competition and less service to the public.
(c)	Concentration of economic power in the
hands of chains and big, powerful retail outlets will not benefit the consumer. Any immediate advantage will be of little benefit in view of the long-term disadvantage that he will suffer from growing monopoly in retail outlets.	*
(d)	The manufacturer may be driven, we were told, to protect himself against the chains and big retailers by himself going into the retail business. This will not make for efficiency. In this connection I wish to deal with the reference by the Minister of Justice (Mr. Garson) last night to Henry Ford and his system. Let me tell the Minister of Justice that Henry Ford is not an example of any ban on resale price maintenance. Henry Ford went into the retail business as well as the manufacturing business. The example was far-fetched. Then I come to my next point.
Eighth, there is no proof that the elimination of resale price maintenance will reduce the cost of living. The Prime Minister (Mr. St. Laurent) said so when he spoke on this subject on October 15. He said it would make no material reduction in the cost of living. The hon. member for Rosetown-Biggar (Mr. Coldwell) said the same thing today. We know of course that the Minister of Justice said something different yesterday, and the hon. member for Coast-Capilano said the opposite this afternoon. I would just as soon take the view of the Prime Minister and the hon. member for Rosetown-Biggar as I would the view of the Minister of Justice and the voluble member for Coast-Capilano. Before anybody becomes too hopeful of price reductions he would do well to read an editorial in the Canadian Unionist, the journal of the Canadian Congress of Labour, of December, 1951 in which I read the following:
The enquiry-
That is the one into resale price maintenance.
-is continuing, and has stirred up considerable interest throughout Canada, but there is no reason to believe that, even if the legislation is passed, it will bring about any reduction in the cost of living.
That is only sound common sense and fact.


An hon. Member:: Who wrote it?


Donald Methuen Fleming: I say to you, sir, that what we are witnessing here, particularly when we see the juxtaposition of paragraphs in the speech from the throne, where the government deals in the first paragraph on page 2 of Hansard with the subject of the rising cost of living and then in the very next paragraph goes on to talk about their proposal to bring

in legislation to ban resale price maintenance, is an invitation to the Canadian people to submit themselves to being fooled and deluded into thinking this legislation is going to bring them a reduction in the cost of their living. That has since been exploded by the Prime Minister and others. In the way this legislation is now being pictured by its sponsors it becomes clear that this is just an attempt to perpetrate a great big hoax upon the hard-pressed consumer who has taken such a beating as the result of government policies, and chiefly from government taxation policy. It is perfectly evident as the result of the course the government has followed in this case that what they are trying to do is make a scapegoat of the small retailer. They do not care what huge inventory losses he is going to suffer.
The government obviously want to provoke price wars. They hope to provoke price wars as a result of loss leadering. They wish to get more advertising of price reductions, however misleading, and they want the people to believe that they have brought it about.
If the government really wishes to do something about the cost of living, let them abandon their iniquitous high taxation policies.


Mr. C. W. Carter (Burin-Burgeo):: Mr. Speaker, as I was privileged to be a member of the joint parliamentary committee on combines legislation I feel I should make some attempt to explain to my constituents as best I can the reasons why I support this legislation. The great task and the great challenge that confronts this generation is to make democracy work. Democracy cannot work unless the people understand and play their full part. The word "people" includes every one of us. It includes producers, consumers, manufacturers, wholesalers, retailers, members of the learned professions and members of parliament. In a democracy such as ours the part of the people is just as important, perhaps even more so, than the part of government. It is obvious that the people cannot play their part and democracy cannot work unless we have an enlightened public opinion.
The enemies of democracy recognize this and spare no effort to confuse public opinion whenever the opportunity offers. The fact that some confusion of public opinion exists is shown by the tendency to make conflicting demands, demands which are contradictory to the point of being mutually exclusive. For example, we have the cry go up for a curb on inflation, and at the same time a demand for greater public expenditure. We get a demand for less taxation on the one hand and at the

same time a cry for increased social benefit payments on the other. We get a demand for greater individual freedom and at the same time a demand for more government control. In the parliamentary committee on combines legislation we had a demand for more freedom of individual enterprise and at the same time a demand for less competition. It is obvious that we cannot have one without the other. Competition is the price that we must be prepared to pay for freedom of enterprise.
Parliament is a deliberative body, and we refer to it with pride as the highest court in the land. We should be very careful not to reduce parliament to the level of a sounding board. This is one place to which the people should be able to look with confidence that they will find the truth, and it is our job to see that they get the truth and the whole truth. To do that we must separate facts from opinions, suppositions and speculations, and see that we place the proper labels on each so the people will be able to give to each one its proper value and thus be able to perform their democratic function.
The present combines legislation makes it illegal for any person or corporation to make an agreement with another person or corporation for the purpose of controlling prices and eliminating competition. It does not, however, in its present form prevent any person or corporation from controlling prices and eliminating competition by means of a series of vertical agreements between the manufacturer and the distributor. The system whereby a dealer agrees to sell an article at a price fixed by the manufacturer is known as resale price maintenance. Some manufacturers have used this device to control prices and evade present legislation. The only solution to this problem is to strengthen the present law by the abolition of price maintenance.
Unfortunately we cannot discuss price maintenance without getting involved in some discussion of prices in general, price levels, profit margins, mark-ups, the cost of living, inflation and other related topics which are of intense public interest. But we should never lose sight of the fact that interesting though these topics are they are nevertheless only secondary considerations. The real purpose of this legislation is to prevent a person or corporation from evading the present law. The real purpose of this legislation is not to combat inflation, not to reduce the cost of living, but to prevent corporations from controlling prices and eliminating competition. And the primary question before this house is simply, shall we retain resale price maintenance and allow corporations to continue
Combines Investigation Act evading the law, or shall we abolish price maintenance and prevent them from doing so?
The position of the government on this matter is indicated by the stand they have taken on government price control in general. In the words of one of the witnesses, this government has resolutely set its face against the imposition of over-all government price control. It would be very inconsistent for the government to take that stand with regard to government control of prices and at the same time sanction a system of private control. Furthermore, the government made a commitment to the people of this nation to abolish price maintenance. When that commitment became known a great deal of organized opposition developed. The government decided to set up a committee so the opponents of this legislation would be afforded an opportunity to state their case in public and to make useful suggestions. I for one am grateful to the government for setting up this committee. Personally I think it was a very wise move; otherwise thousands of simple people like myself would never have had an opportunity of understanding the nature of this problem.
When the committee was set up, the government were charged with retreating from their position, of stalling and of foregoing their commitments. I must confess, Mr. Speaker, that I was very much surprised to find that the same people who accused the government of stalling, turned around in committee and accused them of steamrolling, of railroading the legislation, of making snap decisions without sufficient evidence and without sufficient study.
Although the committee was specifically charged with a study of the recommendations contained in the MacQuarrie report, it should be borne in mind that this was not the only evidence available to the government and to the committee on this subject. A wealth of information was available from many sources. To mention a few there was the royal commission on prices known as the Curtis report; the Lloyd Jacob report of Britain; the British white paper; the debate in the British House of Commons last June; the studies and reports of various United States federal and state organizations; the royal commission on the cost of living in Newfoundland, 1950, and the information and evidence arising from investigations and prosecutions of the federal combines commission.
In general all of this evidence, while admitting that price maintenance does afford some advantages, tends to the general conclusion that the disadvantages greatly outweigh the



Combines Investigation Act advantages, and that price maintenance should be abolished in the public interest.
In addition to all this evidence there were the large number of briefs which were presented to the committee, and which in many cases were supplemented by verbal evidence from witnesses who appeared before the committee. These witnesses were sharply divided into two main groups. The masses of the people as represented generally by the great labour organizations, the large consumer organizations and the co-operative unions, submitted briefs requesting that price maintenance be abolished. With the exception of a few large retail firms, manufacturers' organizations and associations of retailers and wholesalers submitted briefs requesting that price maintenance be retained.
The merits and demerits of price maintenance in itself and its effect on the cost of living are, as I have already said, secondary considerations and important only in so far as they relate to the primary question as to whether any person or corporation should be permitted to use this device to control prices and eliminate competition. However, since so much discussion has revolved around the topic of price maintenance in itself, perhaps it would be worth-while to list a few of the main arguments presented for and against this practice. Those opposed to the practice of price maintenance claim that it should be abolished because (1) it is a system	of private	law	privately	enforcedwithout reference to any court of law; (2) it eliminates competition in distribution; (3) it fosters	competition	between manufacturersfor the goodwill of retailers so that manufacturers outbid each other, offering higher margins, higher mark-ups and greater profits to the retailer and hence higher and higher prices;	(4) it prevents	the more	efficientretailer from passing on the benefits of his efficiency to the consumer in the form of lower prices; (5) it multiplies retail outlets far beyond what is necessary and (6) resale price maintenance	has	increased	greatly
during the past 20 years and is still increasing at an alarming rate.
Those who wish to retain resale price maintenance claim that it should be retained because (1) it protects the small dealer from the predatory price cutting practices of larger and financially stronger firms; (2) it equalizes prices from one end of the country to the other; (3) it keeps prices lower because nationally advertised products are easier to sell and therefore require lower mark-ups; (4) it protects the rights of manufacturers who had built up a national demand for their products; (5) it protects the prestige enjoyed by branded products; (6) it stabilizes production and therefore the nation's economy; and
fMr. Carter.]
(7) if resale price maintenance were abolished many smaller dealers would be forced out of business.
The bulk of the evidence given in support of the retention of resale price maintenance consisted mainly of opinions, suppositions and fears largely based on lack of faith in their fellow man. What few facts did emerge tended to refute their claims.
We are all sympathetic to the little man, whether he is a manufacturer, jobber or retailer. The evidence presented to the committee showed that the efficiency of a business did not increase with its size. Though larger firms secured larger discounts by means of mass buying, yet that advantage was largely offset by the lower overhead and lower operating costs of the little man; and as the hon. member for Coast-Capilano (Mr. Sinclair) has pointed out, also because the little man was largely exempt from corporation taxes. As a result small firms have been able to stay in business and compete with chain stores, large department stores and corporations. The prediction of casualties amongst dealers is not borne out by the evidence, nor by the experience in the grocery trade where competition is fierce and where less than 1 per cent of the goods sold is protected by price maintenance. It is possible that a number of firms will go out of business, because in many cases the number of retail outlets is far greater than the total turnover warrants. The tendency of resale price maintenance is to raise prices to a level where all can stay in business, regardless of the volume of the turnover and regardless of the efficiency of the individual firm.
A great deal of thought was also given to the practice of price cutting known as the loss leader. There is reason to believe that once the background of fixed prices has been removed, the loss leader will lose a great deal of its effectiveness. It was found that this practice assumed so many forms it was practically impossible of definition, and the general conclusion reached was that section 498A of the Criminal Code afforded as much protection as any legislation that can be devised until the problem has assumed more definite and concrete proportions.
The evidence also showed that, other factors being equal or comparable-factors such as geography, wealth, purchasing power, and so on-prices tended to be lower in those areas where price maintenance had been abolished. Last evening the minister pointed out the experience in the United States, where comparisons were possible between four states with price maintenance and four comparable states where price maintenance had been abolished.

In Canada the only comparison possible is in the province of Newfoundland. We Newfoundlanders can speak from personal experience, because we had the doubtful benefit of price maintenance thrust upon us almost overnight. Before confederation price maintenance was not practised in Newfoundland, and its full and sudden impact became apparent almost immediately after confederation. The hon. member for Coast-Capilano has referred to the example of the No. 6 dry cell ignition battery which is an important item for our fishermen. The reference to this item is contained in chapter 10 of the report of the royal commission on the cost of living in Newfoundland, 1950, and was brought to the attention of the committee in a brief submitted by the Newfoundland co-operative union.
As the hon. member for Coast-Capilano has said, before confederation when there was no price maintenance, a No. 6 dry cell ignition battery-


William Joseph Browne: May I ask
the hon. member a question? Is he quoting now from the royal commission report-


Chesley William Carter: Yes, Mr. Speaker.


William Joseph Browne: -or from a letter from the secretary of the co-operative union?


Chesley William Carter: I am quoting now from chapter 10 of the report of the royal commission on the cost of living in Newfoundland.


William Joseph Browne: You have not that in your hand now.


Chesley William Carter: 
Major James William Coldwell: Does the hon. member know the amount of the duty?


Chesley William Carter: I do not know, but I do not think it has any relevance to this argument. Before confederation, and without price maintenance, the landed cost of these paint brushes-the quality being teal No. 2-was 68i cents, and the retail price was 95 cents. After confederation, because there was no
Combines Investigation Act duty, the landed cost fell to 53J cents, but because of resale price maintenance the retail price jumped up to $1.10.


Gordon Knapman Fraser: It was sales tax that jumped that up.


Donald Methuen Fleming: And excise tax.


Stuart Sinclair Garson: Overnight?


Donald Methuen Fleming: Yes. Once you got the election over, you brought taxes into effect on July 1, 1949.


Chesley William Carter: The royal commission points out on page 78 of its report:
In several hardware lines in which there is resale price maintenance, the setting of prices has thus required dealers to take mark-ups definitely higher than those that had prevailed under more open competition. The dealers, doubtless, often had no serious objection to doing so.
On page 79 of the commission report, 1 find this:
Resale price maintenance since confederation has had a marked effect. It has brought many prices in line with national prices. At the same time, it has tended to place prices of drugs, some women's and other clothing, and many hardware and electrical goods above the levels they might have reached if no resale prices had been suggested after confederation.
The witnesses who appeared before the committee laid a great deal of stress on the prestige enjoyed by branded products, which they maintained should be protected. The extent to which the consumer is forced to pay for the prestige of branded products is abundantly illustrated by the evidence concerning aspirin tablets, to which the hon. member for Coast-Capilano referred earlier. Bayer's aspirin tablets retail at 79 cents for 100, while unbranded tablets of the same chemical formula and conforming in every way with the requirements of the Food and Drugs Act retail at only 19 cents per 100 tablets. Naturally, it pays the druggist well to push the sale of Bayer's aspirin in preference to the unbranded tablet.
In conclusion, Mr. Speaker, I should like to make one brief reference to a matter which concerned me, not only as a member of the committee but as a new Canadian. It relates to the number of witnesses representing manufacturers, wholesalers and retailers, who expressed fear, suspicion and mistrust in their fellow members in the organizations which they represented. If their fears were genuine, we are asked to believe that our leading businessmen, the managers of our most prominent firms, are extremely greedy and selfish individuals who are just waiting for an opportunity to resort to the law of the jungle, and who will stop at nothing to eliminate their weaker and less fortunate competitors. That there

Combines Investigation Act is some greed and selfishness we must admit. Otherwise there would be no need for any combines legislation at all. But I find it extremely difficult to believe that the majority of our businessmen are very different from the rest of us in that respect. It is obvious that we cannot make people honest, nor can we remove greed and selfishness, simply by passing a law. It is a moral problem rather than a legal or economic problem, and while legislation is necessary, a more positive approach is required.
The evidence that a more positive approach is possible and that a positive answer to this problem exists is contained in a book which I have lately read and which is entitled "World Rebuilt" by Peter Howard. This book is a record of events that are taking place at the present time and which are destined to change the course of history. I was impressed with the wealth of evidence that industry, business and management all over the free world are awakening to a new sense of morality and of responsibility for the nation and for the democratic way of life. "The old order changeth, yielding place to new." Whether we are prepared' to admit it or not, a new order is coming into existence. A new world is being built, and the slogan "business as usual" has long been out of date.
Stalin, in a lecture to his communist leaders at Moscow, is reported to have said: If capitalism could adapt its production not to the getting of maximum profits but to the systematic improvement of the masses of the people, then there would be no crisis; but then capitalism would not be capitalism.
The stories of such eminent and internationally famous businessmen as Dr. Heinrich Kost, managing director of the Rhein-prensen Company and chairman of the German coal board; of Robert Tilge, French industrialist and secretary of the employers federation of northern France; of Charles Redele, large producer of foodstuffs in Holland; and many others as related by Peter Howard, all testify to the fact that capitalism is being gripped by a much greater idea than the mere accumulation of profits and that in industry, business, management and labour a new type of businessman is emerging to match the new era.
I strongly recommend this book to every member of parliament, to every businessman and to every labour leader in Canada if only for the purpose of reading the thrilling story of the National Airlines in the United States. This company was on the point of being dismembered and broken up because of bad relations between management and

pilots. At that point the president, George Baker, began to apply this new thinking and this new positive approach to the problem, with the amazing result that within the space of a few months his balance sheet changed from a deficit to a profit of half a million dollars per month. I think that amply illustrates the soundness of this positive approach to business and management problems.
In a statement made in Washington, D.C., on May 1, 1951, Mr. D. W. Rentzel. chairman of the civil aeronautics board, said:
To those familiar with the long history of bitter and acrimonious dispute, the transformation in the attitude of the parties from one of suspicion and hostility to an attitude of mutual co-operation and trust has been little short of miraculous.
That statement which I have quoted referred to the National Airlines.
We Canadians are richly blessed in that we have inherited the most favoured nation *on the face of the earth. To a large extent the fate of this nation and of this people rests in the hands of our businessmen. Underproduction, through the selfish application of the economics of scarcity, can easily push our economy over the border from inflation to disastrous deflation.
Price determination is not a matter of government control nor of private law. It is simply a matter of manufacturer, wholesaler and retailer each honestly facing the facts and making a moral decision based on what is right having due regard for the interests of the consumer and the welfare of the nation, as well as for his own individual interest.
During world war II Canadian business astonished the world with its amazing achievements. I feel confident, Mr. Speaker, that when they realize the full extent of their national responsibilities Canadian businessmen will again prove equal to this even greater challenge which is the mark of our time.


William Joseph Browne: I should like to ask the hon. member a question.


Alphonse Fournier: Just one?


William Joseph Browne: Will the hon. member tell me how much the cost of living went down as a result of the royal commission in Newfoundland on the cost of living?


Chesley William Carter: One of the reasons the cost of living did not go down in Newfoundland, as we had expected, was that the practice of resale price maintenance offset the advantages which we expected to derive from the removal of duty.


Donald Methuen Fleming: It did not offset the effect of the dominion government's taxes, either.


Mrs. Ellen L. Fairclough (Hamilton West):: Mr. Speaker, after that last remark I think 1 should start out by saying that now I have heard everything. The hon. member for Burin-Burgeo (Mr. Carter) who has just taken his seat stated that all consumers were in favour of this legislation, and by listing the various people who were against it he made the implication that all business was against this legislation. I think I should not go on with the remarks I propose to make without drawing attention to this statement because it is so utterly opposed to what is actually the case. We sat in this committee for some time, and we heard businessmen both for and against. We had from businessmen briefs both for and against the legislation. We had briefs-most of them from the consumer angle, I grant you-either for or partly for the legislation. I would not say they were entirely in favour of the legislation.
I should like to start, Mr. Speaker, by trying to bring this question out of the realm of academic debate and down to a practical position, and to ask bluntly these questions: Who will benefit by this legislation? Who will suffer from it? Why is it being introduced? I do not think for a moment that anyone is under any misapprehension as to who will benefit. Certainly those merchandisers who are manufacturers of private brands, who are in the fortunate position of being at one and the same time the manufacturer and their own retailer, stand to benefit from this legislation.
Who will suffer? Well, the small businessman will suffer, and the consumer will suffer. I have been interested to hear the debate which	has	taken	place thus farbecause at some place in almost every speech someone has	said,	"We	love the smallbusinessman, but-".	I do not think the
small businessman is under any misapprehension about the legislation at all. I do think that a great many consumers are misled.
I intend to deal with that at a later point, but I should	like to go	on now and askthis question:	Why	is this	legislation being
introduced? Is it being introduced to bring down the cost of living? I do not believe it is, because all the government members have been very careful to say that it will have no effect on the cost of living. The Prime Minister (Mr. St. Laurent) himself early in the session said he did not expect that the introduction of this legislation would have any effect whatever on the cost of living.
I personally went to some pains to do a piece of research on this point. I took the cost of living index items and broke them down into those which were price controlled and those which were not price controlled.
Combines Investigation Act And I might say that a large part of those which are under a resale price maintenance policy are under a policy dictated by a government, either federal or provincial. Some of the other items are under other forms of price maintenance, such as transportation and communications. When you break it all down, it comes out to something like this: The food items make up 31 per cent of the cost of living index. Of that total, 1/15 of 1 per cent are under a rigid price maintenance policy. Then rentals make up 19 per cent; fuel and light, 6 per cent; clothing, 12 per cent; home furnishings, 9 per cent and miscellaneous, 23 per cent. When you take the various weights- I hope I have done it correctly-and take the number of items which are maintained and take the percentage that is of the total weight, it finally comes down to 6-3 per cent of the total.
As I said before, some of the items which are maintained will not be changed anyway. You will not change railway fares; you will not change doctors' fees; you will not change telephone bills; you will not change many other things. You will not change transportation costs, because these are things that cannot be changed by this legislation. Therefore if we took a wildly optimistic view of what this might do to the cost of living, and said that on the over-all basis the whole cost of living might drop on these items by 5 per cent, then we would have -31 per cent of the cost of living.
I think I have been well repaid for the work I did on this, because it has shown me how foolish is any argument which would try to support the belief that this will have any effect at all on the cost of living. Yet I believe many consumers in this country are under the impression, rightly or wrongly, that this legislation is being brought down to remedy in some way the situation in which we find ourselves today because of the greatly increased cost of living. So perhaps the answer to the question as to why this legislation is being introduced is this: while it might not bring down the cost of living, it may very well be that it has been brought in as an answer to the pressure from an inflation-weary country. Undoubtedly this pressure has prompted the government to do something. Far from adopting a course which might have had some effect on combines legislation, this government has chosen to hide behind a smokescreen of resale price maintenance, to attempt by eliminating this practice to demonstrate to the people of Canada that it has taken action, at the same time pleasing those who have monopolistic tendencies by removing one of the impediments to the pursuit of certain trade practices.

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This legislation is not going to help the consumer. It is not going to do a thing for the pensioners who are living on the same pensions but with a greatly increased cost of living. It is not going to help the elderly people one bit. It is not going to be of any service at all to the homemaker. The opening paragraph of the brief presented to the committee by the Canadian Congress of Labour, as it is set out at page 73 of the proceedings of the committee, states:
The congress does not believe that either the Combines Investigation Act (with the related provisions of the Criminal Code) or the prohibition of resale price maintenance, will have any marked effect on the cost of living.
The minister in his remarks last night made reference to suggested prices. I take it I am correct in believing that he meant he had no personal axe to grind against those who were suggesting resale prices. I think there is a great deal of doubt in the minds of committee members and others as to what constitutes a maintained price and what constitutes a suggested price. We talked about this to some extent in the committee. Mr. McGregor had some things to say in this connection at page 614 of the evidence. I questioned him as follows:
To what extent would you think control of suggested resale prices might go? To the extent of placing a price on a product? A. It might be, yes.
Q. Would you think it would not be illegal under the proposed legislation to put a price on a label or a bottle or a shirt? A. No, under this particular proposal it does not seem that it would. This bill does not go the whole hog but it may be that it would prevent the enforced price. There is still a lot going on in suggested prices where really competition is not working and you might later, in a few years hence, find it is doing damage and have to deal with it.
Q. You say that the next step may be the abolition of the suggested price? A. It may be that a situation will develop where competition is not working. Perhaps not, and if not I think it should be left free. As long as a man is free and does not have to adopt the suggestion of the manufacturer-
You will notice the witness says that a man does not have to adopt the suggestion of the manufacturer. That is a rather foolish statement because if it is not enforced, then he certainly does not have to adopt it. The answer continues:	.
As long as a man is free and does not have to adopt the suggestion of the manufacturer, then I think probably it is better to have the form of the bill as it is here.
I submit here, as I did in the committee, that the number of strictly maintained lines is negligible. Most are suggested and preserved as such as long as business is continuing on an even tenor. This brings up two possibilities. The first is that this legislation will open the door for the destruction of business by encouraging an all-out attack on famous brands, those items which are

maintained. We have seen what happens when a price war is started in connection with one or two articles. The whole business of the community is disrupted, on both maintained and non-maintained lines. If that does not happen, then there is the possibility that an even more sinister intent is present in the enforcement of this legislation and such regulations as may be made thereunder than appears at the moment.
I should like to refer for a few minutes to the evidence presented in the committee. First, I should like to call your attention to a phrase which occurs in the speech from the throne, "without impairing our free institutions". I think we all agree that freedom is something not easily defined. We have always claimed that one of the greatest products of freedom is our courts of justice. There is a saying abroad, I do not know how true it is in actual practice, that a man is innocent until he is proved guilty. This inquiry was in reverse. A charge was levelled against these people who operated, either at the manufacturing or retailing level, under a system of resale price maintenance. In effect the government said, "You are guilty; you prove that you are innocent". Far from the government proving that they were guilty, far from the government proving that the results of price maintenance worked to the disadvantage of the consumer, they simply made a bald statement.
I would remind hon. members that in the examination that followed the presentation of the brief by the Canadian Congress of Labour the witness stated that if they could be convinced that resale price maintenance worked to the advantage rather than the disadvantage of the consumer, they would support it. They were not convinced that it worked to the disadvantage of the consumer.
In the brief presented by the Trades and Labour Congress they said they were not quite satisfied that a case had been made out against resale price maintenance. In spite of that, statements are made repeatedly in this house that all consumers are against resale price maintenance. The fact is that the two largest groups representing consumers have both said they have had no proof that resale price maintenance is not to the advantage of the consumer.
Statement after statement was made and then the accused, if we can use that term for the businessman of Canada, was told to defend himself. When he proceeded to do so he was told that he had given no proof, that he had presented no figures. He then said he would bring figures. I refer hon. members to pages 48'9, 490 and 491 of the proceedings of the committee. While they

do not set out the results of an exhaustive study, hon. members will find there a sample of the type of thing that could be and was produced. The gentleman who produced those figures stated quite bluntly that some were in favour of his argument and some were opposed to it. He took them as they came on a selected list of articles and presented what he had. That was the kind of evidence we should have had in a more exhaustive form from other people engaged in business. At times the committee proceedings took on the complexion of a criminal trial instead of an inquiry. I deplored the manner in which expert witnesses were abused and I might say almost insulted at times.
For a few minutes I should like to talk about the small businessman. I think of him first as being a distributor of needed goods. Within the last six or seven years we faced a situation in this country where many of the articles sorely needed by the consumer were in very short supply. Some articles were rationed, while others were distributed under a sort of voluntary rationing system. In some cases the manufacturer and the first distributor were called upon by the regulations of the wartime prices and trade board to distribute the product which was in short supply on a pro rata basis to their customers on the basis of the historical pattern of supply which showed on their books. It frequently happened that even at the wholesale level some fairly good-sized merchants got only half a case of certain tinned goods. That was particularly true of salmon, which was in very short supply. A case would go out to the retailer, who knew that he had to distribute it to all his customers. He had to use his own judgment as to who was going to get the goods. So he distributed his goods according to a similar historical pattern of trade. He knew thet certain customers habitually bought certain articles, so he saved some for them. The same was true of other lines, such as soaps.
I am sure that there is not a housewife in this country who does not remember when she did one of two things. Either she stood in line for a long time in a store where she had heard there was a supply of goods and where the goods were distributed on an impersonal basis of first come first served. Maybe she got some and maybe she did not. Or if she had been in the habit of dealing with one store she knew she could depend on that storekeeper to see that she got her fair share.
Some peculiar statements have been made during the course of this debate. I look back on this pattern of distribution with which I was very familiar, and I find it very difficult to make it fit in with some of the statements that have been made. From my knowledge
Combines Investigation Act
of the small businessman I find it difficult to understand how the minister could say that after all the small businessman does not pay any corporation tax. I know he does not pay any corporation tax. He pays his personal income tax at the personal rate on the total amount of money his business makes, whether he withdraws it or whether he does not, and he pays even on the profit he makes which he leaves in his business for expansion or for the purchase of new equipment. He does not benefit by the system which is in effect for corporations whereby he is permitted to withdraw his salary and then pay at the lower rate of corporation tax for small incorporated businesses. I am sure the Minister of Finance (Mr. Abbott) will bear me out in that. I believe the Minister of Justice (Mr. Garson) was a little mistaken when he made that remark, and I am sure if he would investigate it he would wish to withdraw it.
Several things have not yet been touched in the course of this debate. I should like to build up for the house a picture of the type of thing that is likely to happen if the government persists in passing this legislation. We will undoubtedly have a raid on name brands. We will have a race for the lowest price. In the race for the lowest price, which will probably see keen competition between large outlets that can well afford it, the poor little fellow on the same street is going to see the crowds just running past his door, not in but past. The next step will be a demand on the manufacturer to supply a product to meet a price. By that I mean this. We will suppose that a dealer has a brand name shirt which he sells for $5. When this competition develops his competitor will start to sell it for $4.75. Then he will sell it for $4.50, and finally a demand will be made on the manufacturer for a shirt which will retail for $3.99.
Who is going to say whether two inches less material has been put into that shirt, whether a lower grade of button has been used and whether-which may be a very serious thing when you consider the wearing qualities of a garment-a lower grade of thread has been used. During the war there were many instances where garments literally fell apart because of the low grade of thread which was available. These low grades may be used from choice if we are going to get into an all-out price-cutting war. Therefore we are faced with deterioration of quality, and it is serious matter. The extra coat of enamel on the saucepan disappears, the extra inch of material in the garment disappears, the extra ounce of vegetables in the soup disappears, all to meet a demand for an article at a price which will be competitive with that of the price cutter.

Combines Investigation Act
There are a great many people in this country who are entirely dependent upon the small retailer for many things, for service, credit, advice and even for a personal interest in their families. They depend upon him to keep them in food when they are out of work for a while, and that is a serious thing today when this country is witnessing the largest unemployment it has known for many years. The little fellow supports these people, and sometimes he never collects from them. He is the backbone of our economy; yet he was accused before the committee. Even his representative, the one organization which is closest to the small independent retailer, was refused a hearing before the committee. I know perfectly well the committee took the stand that the parent body, which represents all retailers in the Dominion of Canada, had had a hearing; but the policy adopted by the committee was broken when they agreed to hear other members of that parent body. Nevertheless they refused to hear the retail merchants association of Canada which represents several thousands of small independent retailers right across the country.


Gordon Knapman Fraser: Shame.


Ellen Louks Fairclough: It reminds me of the situation which existed in the dark days. When a woman was accused of being a witch they took her out and threw her in the pond. If she swam she was a witch and they took her out and burned her. If she sank to the bottom she was innocent but of course by then she was drowned, so they just brushed their hands, walked home and said: "Well, we did our duty to the community; too bad, but we did our duty." It seems to me that the small retailer is in exactly that position today. He is being thrown into the pond. If he is a wizard and manages to crawl out then he will be suspect under this new legislation. If he sinks and drowns, too bad, but we have done our duty.
I do not want to leave the impression that I do not approve of some of these newer streamlined operations, because I think they have made a great contribution to distribution in Canada. I believe they have made a great contribution to our present conditions of living, but that does not mean they should entirely replace the independent retailer who to my mind is the very backbone of the Canadian economy.
I do not want my time to run out before I say a few words about the consumer. While we had, as I said before, some briefs for, some briefs against and some that were neutral, there was nothing neutral about the telegrams and letters that I received. I rather wish some members could have walked into


my office a few days ago when these telegrams started to come. It was about as bad as the snowstorm we are having today. I made a summary of what I received and there are one or two I should like to read. From British Columbia there were 75, from Alberta 77, from Saskatchewan 14, from Manitoba 88, from Ontario 40, from Quebec 246, and from Nova Scotia 15. There were also another 5 which were letters and not telegrams. I received a total of 510 communications from women all signed, the majority of them with addresses attached. I also received a great number from retailers. I did not count them, but the ones to which I have referred were all from women from coast to coast. There were a few from the city of Montreal which were all the same message, but most were entirely different and quite apparently written individually by these women. Hon. members will understand in a moment why I have chosen this one to read first. It is from Russell, Manitoba, and reads as follows:
Believe me, Mrs. Fairclough, we are definitely against the government's bill restricting price maintenance at retail level. Please convey our stand to Stuart Garson. Thanks.
It is all yours.


Arza Clair Casselman: That is his home town.


Douglas Charles Abbott: Merry Christmas.


Ellen Louks Fairclough: I have one from Magog, Quebec.


Douglas Charles Abbott: A good part of the country.


Ellen Louks Fairclough: It reads as follows:
Consumers association views on price maintenance not truly representative of Canadian women. Urge you to continue battle against unwise legislation.
I have another one from Magog. This time it is from the board of trade. I am saying it is from the board because it is different from the others. They all have women's names on them. It reads:
Price maintenance brief by Canadian association of consumers must have been by big city person. In small towns we feel our local shops driven out of business and our shopping curtailed.
I have another one from Kelowna, British Columbia, which reads:
As a housewife I feel price maintenance should be upheld because it maintains orderly buying and quality and definite spending power.
The next one is from Montreal, which reads:
Not wish of women that quality guaranteeing price maintenance be abolished.
That one, Mr. Speaker, I think is a very well worded telegram: "quality guaranteeing price maintenance." I think we might all do well to let that sink in. I have not time to read all of these and some of the letters

that would bear hearing, but I should like to read just one paragraph from a telegram received from the Vancouver manager of the pharmaceutical association of British Columbia. It reads:
Young business men launched by rehabilitation and ex-service men's grants will not appreciate being forced out of business by effort of government to hoodwink the public that present price legislation can influence cost of living figures.
I thought I would have plenty of time, Mr. Speaker, to get through with what I would like to say, but I see that I am not going to have half enough time; therefore I shall have to skip ahead and make a few comments. I would like to suggest that every hon. member read this booklet which I am sure they have received entitled "One Hundred and Fifty Million Reasons for Fair Trade," and in particular page 3, the article entitled "Dedication". I wish I could put this on the record, but I have not time to read it. It is well worth anyone's reading. There is a good deal of information in the whole book which is well worth taking into consideration. I should like to read two items to which this gentleman felt attention should be drawn, two lessons which he claims ought to be drawn from experience:
1.	Any economic force as powerful as brand names must be harnessed for the good of the greatest number.
2.	To abuse this economic power is like playing with matches, and may result in burning the house down.
I contend that his legislation is a blind, Mr. Speaker. It is a shield1 to hide the ugly fact that this government's taxation and credit restriction policies have brought merchandising to a standstill in many lines, and have resulted in the largest number of unemployed for many years. On December 13 an article appeared in a Toronto paper headed "Unemployment increases sharply in many industries." It gave the figure for the province of Ontario as 77,837. In the ten largest cities in Canada there is a total unemployment of 82,400. I do not know how many times that figure of unemployment is across the country as a whole. Resale price maintenance, far from deserving the criticism which has been levelled at it, is the only anti-inflationary policy at work in Canada today, and I deplore the lack of information and lack of understanding which prompts the criticism.
I maintain, Mr. Speaker, that we have gone at this whole thing in much too fierce a manner. We have rushed through something which merited a great deal more consideration. We have been led up the primrose path by theorists and others with no practical knowledge of the workings of distribution in this country, and who say
Combines Investigation Act such and such a thing takes place and something else happens. True, it is all very well in theory, but the little businessmen on the corners, many of whom cannot add very well, can tell you much more about what actually happens in the movement of goods in a certain specific set of circumstances.
I have an open letter which came to me today, and I presume some other hon. members have it. I am not going to take time to read the whole thing. It is from a woman in Toronto who claims to have worked for one of the companies that presented a brief, but was not called upon by the committee to explain or amplify the brief or to answer questions. I should like to read just one paragraph of her letter. It says:
I really can't understand why this legislation- which will be detrimental to Canadians in all walks of life-is being rushed through at such a terrific pace, why groups opposing the legislation are being "muzzled" and why it can't be investigated properly -not by a group of lawyers and economists who have never even sold a can of beans-but by those persons who understand retail operations, profit margins, retailers' costs, etc.
We have had too little time, Mr. Speaker; too little time for the preparation of briefs by these companies, too little time for the applications to be heard, too little time for the consideration of evidence, and too little time for the calling of additional witnesses which were requested by the committee. I feel that the government has been sadly misguided in presenting this legislation. It is like burning down the house to try to catch a mouse.


Mr. H. A. Hosking (Wellington South):: Mr. Speaker, I did not have the pleasure of being a member of the committee to study this subject, but I have had some business experience, and it is with that thought in mind that I wish to take just a few moments of the time of this house. I cannot help but sum up the various stands taken by the four different parties that have taken part in this debate. I quite understand the Liberal position because they have always taken the attitude that it was necessary to do the greatest amount of good for the greatest number of people. In this particular topic we are supported by the C.C.F.-


Donald Methuen Fleming: The kiss of death.


Henry Alfred Hosking: -who generally support any platform that will get them the largest amount of popularity from the greatest number of people.


Mr. Hodgson:: Are you not suspicious?

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Henry Alfred Hosking: We are opposed by the Tories, who, as everyone knows, are interested only in benefiting one, and only one, faction of- the people, namely big business.


Donald Methuen Fleming: This measure will benefit big business, and it will kill little business.


Henry Alfred Hosking: In this particular case they are speaking in behalf of big business.


Mr. Cardiff:: What do you call Eaton's?


Henry Alfred Hosking: After I received a few telegrams from various business people in my riding I spent some time making inquiries to find out whether any of the small shopkeepers who operate their own individual businesses on the corners of my towns and cities had made any representations to have price maintenance brought into effect. I could not find an instance where one of the small shopkeepers had suggested that they wanted or had instigated price maintenance. Thus I must assume that although at the present time they are under the operation of price maintenance, it was not instigated at their request; and since it was not instigated at their request then I started to figure out who wants this thing. After listening to the very explicit and enlightening address by the member for Eglinton (Mr. Fleming), I decided that the chain stores could buy a little cheaper in larger volume. If they could buy cheaper in larger volume and sell at maintained prices, they must make a much larger profit. After ascertaining that, I came to the conclusion that this price maintenance^ was something that was desired by big business.
For the moment I shall be honest and fair, and say that the small shopkeeper enjoys some benefits from this system; but what will happen to him eventually we are not prepared to say. Having had this brought to my attention, I did some research on it. I should like to give the house three situations showing various effects of taxes which, in some respects, answer the point raised by the hon. member for Hamilton West (Mrs. Fairclough). This situation is the result of the necessity for this country to defend itself. We on this side of the house do not like it, but this taxation is something which we have to endure. I should like to explain to the house just what the effects of taxation are on the small businessman and the large businessman who is incorporated. I do not say these arguments will convince the opposition, because they are not easy to convince when they do not want to be convinced. But perhaps my arguments will explain why the Minister of Justice asked the MacQuarrie

committee to present a special report, and why this legislation was introduced at this session.
Shortly after the last budget it became apparent that there was a change in the operation of the retail trade. Price fixation became rampant. It was necessary that something be done to correct this. The figures I shall present will prove beyond any doubt that this is the case. As an example, I have taken the case of a shopkeeper, married and with two children, who had a net profit- including interest from his investment and the results of his labour-of $10,000. This gentleman who owns his own business will pay income taxes amounting to $1,950. He has a net return for his labour of $8,050. Let us assume that a stockholder in an incorporated chain store had no other source of income, but operated a chain store next door to this private shopkeeper. What would he have to get in net profit, after wages and everything else had been paid, in order to receive as a dividend the same amount of money the small shopkeeper received? We find that for him to receive the same amount of net income -the individual who operates his own store is not incorporated-he would have to receive $20,100 in profits. For the operation of this country and for the defence of this country, this chain store stockholder would pay $12,050 in income taxes as against the $1,950 that the small shopkeeper would pay. But that is not the usual situation in these chain stores.
The person who has money invested in these incorporated chain stores generally is not the type of man who just invests his money and sits idly by living on the interest. In most cases, fortunately for the Dominion of Canada, he happens to be an industrious individual. Let us assume he could work and earn as much as the private shopkeeper, so that he has a private income of $10,000 a year. He has money invested in the chain store which has to operate beside the private small shopkeeper. Under those conditions just what would this chain store have to produce in net profit, after paying wages, taxes and all the expenses of running the store, in order to return to the individual $8,050? We find that he has to get from that chain store $30,000 in profit in order to receive the same amount of money the small shopkeeper received for working in his store. In other words, through necessity-and I hope the day will come when this government will not be forced into a position where it has to tax at this most inhuman rate-


Donald Methuen Fleming: They do not have to do so now.


Henry Alfred Hosking: In this party we happen to oelieve in paying our debts. There are certain people who do not want to take the responsibility of paying for the war, but we happen to be in a position where we think it is wise to pay off that debt.


Donald Methuen Fleming: Why not budget for it, then?


Henry Alfred Hosking: We budgeted for contingencies, and because our country's financial position is a little better than we expected we are spending the extra money which has come to us in the proper way.


Stanley Howard Knowles: Is an election a contingency?


Henry Alfred Hosking: The stockholder who has money invested in this chain store has to pay $21,950 in taxes in order to receive the same amount of money as the small shopkeeper who pays $1,950. It is for that reason we are bringing in this legislation. There is only one reason for it, and it was necessary that it be introduced at this time.
I should like to make a few other observations. The opposition have always taken the stand that if they could get the government to do something bad they could defeat us. During the time I have been in this house I have watched the Tories trying to put us in a position where we would do something bad, and then they would be able to defeat us at the next election. It is for that reason we are having this stall proposition. It was evident all the way through the committee. Every member of this house knew the government wanted to get this bill into the house and passed. The Tories thought if they could hold up this measure, without taking sides, they would force us to do something bad. Fortunately our party is determined that we shall sit as long as the Tories wish; we shall give them every opportunity to stall, even until Christmas day, but when they are finished we shall give the people of this country good government. The Tories can stall as long as they wish, but we shall still be here to give the people of this country good government when the Tories have finished stalling.
Having said that, I should like to make one other observation.


Donald Methuen Fleming: Do not stall.


Henry Alfred Hosking: I shall not be speaking for forty minutes, you can be sure of that. Last spring I listened until I was tired to the Tories complaining about our credit restrictions. I listened to them trying to prevent us from giving good legislation until I was sick. It was most repulsive. We wanted to go ahead and do something about the cost
Combines Investigation Act of living. Let any person in that Tory government which sticks up for big business-


George Harris Hees: Tory government?


Henry Alfred Hosking: -Tory opposition, say that they were not on the side of big business.


Donald Methuen Fleming: You are for big business. You are trying to kill small business by means of this bill.


Mr. Speaker:: Order.


Henry Alfred Hosking: I happen to be in a position to say that this legislation on credit restrictions came close to home. I know something about it, and I can tell hon. members of the opposition this as to the position we took last spring and against which they talked for hours and hours. We had to listen to it, the same as we do now, when they tried to put us in the position-


An hon. Member:: Who is talking now?


Mr. Speaker:: Order.


Henry Alfred Hosking: -of making it appear that we would not do anything for the majority of the people or that we would not make the small people's lot better.


Donald Methuen Fleming: Such as Eaton's and the chains.


Henry Alfred Hosking: We eventually got the legislation through, and I would defy anybody in this house to say that since our credit restrictions went through, they cannot buy an automobile today for $100 to $400 less than they could before March 1. The same is true of washing machines and refrigerators.


Donald Methuen Fleming: That must be on the black
market.


Henry Alfred Hosking: We have nothing to do with that. Your policy of price controls will produce that effect. Their hindering tactics were in operation then just as they are now. They said: Let us put the government into the position where they will not pass good legislation; then we will get the benefit of their mistakes at some later date. I say to you, Mr. Speaker, I am highly pleased that the government is going ahead with this legislation and that it will continue to do things for the small people-


An hon. Member:: Like Eaton's.


Henry Alfred Hosking: -the small shopkeepers.


Donald Methuen Fleming: Like Eaton's and the chains.


Henry Alfred Hosking: When the taxes were put on by the Minister of Finance, he put the main taxes on the large corporations that were able to pay. The small shopkeeper pays $1,950

Combines Investigation Act against the incorporated large chain store's tax of $21,950. I submit that we have given these people the opportunity to compete and more than compete, namely to put the chain stores in a position where they want this price maintenance. The Tory party supports the big chain store group who want these chain stores to make a profit. They find it exceedingly difficult today to compete with the small corner store. They cannot compete if the small corner store operator wishes to cut his prices and is able to do so. They cannot compete and pay taxes of $21,950 as against $1,950.
At 6.15 p.m. the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
George Harris Hees: Mr. Speaker, during the past day and a half I have sensed a feeling of unreality in this chamber, due to the fact that I have heard Liberal speaker after Liberal speaker rise in his place and, in enunciating the principles of the Liberal party, say that anything to do with combines has always been very much looked down upon by the Liberal party and the Liberal government, and that such things have been ruthlessly prosecuted and stamped out.
Hearing this sort of thing time and again, I have had to pinch myself to make sure I was awake. Could this be the same Liberal party I was hearing about today that, only two short years ago, concealed for as long as ten months a report concerning an inquiry into an industry? That report came to light only because Mr. McGregor, who was then combines commissioner and about whom the government has so proudly boasted yesterday and today, became so revolted by the dishonesty of the course the government was pursuing in this connection that he resigned, and the whole thing then came to light.
I had to look over to the other side of the chamber to reassure myself that this was the same Liberal party, the same Liberal government these speakers were talking about, a government as they have said that has always been against combines, has stamped them out and done everything it could to make sure they did not exist. I looked over there and saw the same Minister of Justice (Mr. Garson), under whose department all this had happened, in protest against whose action the combines commissioner of that day had resigned. I looked a little further to his right and I saw the Minister of Trade and Commerce (Mr. Howe), the man who had pulled
[Mr. Hosking.l
the strings that caused the Minister of Justice to take that very regrettable action. And then, Mr. Speaker, I asked myself this question: Just how white can a party paint itself, when such a very short time ago it was so very, very black?
I should like to go on now to say a few things about the proceedings of the committee on which I was privileged to serve during the last month. I speak of course of the committee which dealt with the question of resale ' price maintenance. After sitting for only a very few days on the committee, three things became obvious. First of all it became obvious that the government did not intend to pay even the slightest attention to the views of the small retailers who came forward to present their case. Second, it became clear that the loss leader was a very real threat to the business life of the small shopkeeper. Third, it was clear that the fair trade laws of the United States have proved to be more satisfactory to the people of that country than the abolition of price maintenance.
I should like to deal with those three matters, and I turn first to the consideration given to the point of view of the retailers. From the very first it was obvious that the small retailer was condemned before he even began to defend himself. The lawyers who were hired by the government, and who were supposed to be present as impartial questioners, had obviously been instructed by the government to destroy the case of the small retailer at the very first opportunity.
Their approach to the witnesses was that of a prosecuting attorney who was bent on proving that by trying to obtain a fair and stable price for his goods, the small shopkeeper is in some way guilty of a crime. It was in this atmosphere that the hearings of the committee were conducted, with the result that instead of the committee making a serious study of the facts in the case, the hearings were, in fact, a complete farce.
Secondly I should like to deal with the loss leader. Literally every witness who appeared before the committee stated that the loss leader is a very real threat to the life of the small shopkeeper. Among those who stated this view was no less a person than Mr. Fred McGregor, the former combines commissioner who, although he opposed resale price maintenance in theory, said that it was highly desirable to try to define the loss leader and to work out practical legislation to outlaw its operation.
Despite the overwhelming evidence that practical and enforceable legislation against the loss leader is needed, if price maintenance is to be abolished, the government steadfastly

refused to give this matter any further consideration. In effect the government said that the fate of the small retailer is no concern to them.
Finally I would draw the attention of the house to the fair trade laws of the United States. For a moment I should like to deal with the history of price maintenance and the growth of these fair trade laws in that country. Resale price maintenance was made illegal in the United States in the year 1900. I think it is very important to remember that date, because it was more than fifty years ago that that country did exactly what we are proposing to do today.
During the next thirty years, both consumers and retailers in the United States found that the conditions which this situation created were unsatisfactory. In 1931 the abolition of price maintenance was replaced by the first fair trade law, in the state of California. This law proved to be so satisfactory to both consumers and retailers that today forty-five out of the forty-eight states in the United States have replaced the abolition of price maintenance with fair trade laws.
i think it is obvious that the fair trade laws in the United States are just as satisfactory to consumers as they are to retailers, because there are more consumers than there are retailers, and consumers elect governments. If the fair trade laws had not proved to be more satisfactory to the consumers than the abolition of price maintenance, these forty-five governments would have been thrown out and the fair trade laws would have been thrown out with them.
The fact that the number of state governments that have introduced fair trade laws has increased from one to forty-five in the last twenty years demonstrates clearly, I believe, that the overwhelming majority of people in the United States are satisfied with the deal they get under the fair trade laws. It also demonstrates, I believe, that both the consumers and the retailers feel that they get a better deal under these laws than they got during that period when resale price maintenance was abolished.
I do not claim for a moment that laws which are satisfactory to the people of the United States are necessarily the best for Canada. However, I think we must remember that our economy and our buying habits are similar to those of the people of the United States. Therefore if we have any sense at all, and if we feel any responsibility to the people who elected us to this parliament, we should examine very carefully indeed their experience during .the past half century before embarking on new legislation of our own. We are planning to take a step which they
Combines Investigation Act took more than fifty years ago, a step which has proved unsatisfactory to 150 million people just to the south of us, during that fifty-year trial period. Today the step which they took more than fifty years ago has been almost unanimously revoked by the people of the United States. If we are to follow the course which this Liberal government now plans to take, we are going to turn back the clock by fifty years.
I believe the committee on resale price maintenance should be reconvened, for three reasons: First, so the small retailer can be given full opportunity to state his case in an-unbiased atmosphere; second, so a concerted attempt can be made to define the loss leader-and work out practical and enforceable legislation to curtail its abuses; third, so a thorough study of the fair trade laws of the United States can be made to determine if those laws can be adapted to the Canadian economy. I, for one, feel very confident that they can, because, as I have said, our economy is practically identical with the economy of the United States.
Having sat on this committee for nearly a month, I believe this legislation is hasty and ill-considered, and is merely an attempt to draw a red herring across the trail of the ever-increasing cost of living, in an effort to take the people's minds off .that very real problem. I believe that without a thorough and honest investigation of this whole problem, we are going to get legislation which 150 million people in the United States have tried and discarded after a trial lasting fifty years. Can we afford to ignore the lesson which has been learned by the most industrialized nation in the world today? I believe that the answer is an emphatic "no".


Mr. Roland Beaudry (St. James):: Mr. Speaker, I want to record an amazing incident which happened yesterday and which has been repeated in spots today. That is the trip taken to the land of make-believe under the guidance or direction of the Minister of Justice (Mr. Garson), aided and abetted in part or in whole by some on either side of this house. Let me assure you that it is a somewhat startling experience to be jolted from the corner of St. Denis and St. Catherine streets in Montreal, where I was mentally lost in the contemplation of an appealing store window, and find oneself propelled .to the Barbary coast. Yet that happened to me yesterday.
But not without avail, because, there, I was allowed to witness, in the fullest possible

Combines Investigation Act' bloom, the triumph of the merchandising and bargaining rights of the genus homo, tradesman, producer or retailer.
There, hidden behind a wide expanse of broad black backs manning the oars valiantly, if somewhat reluctantly, I was given to see with my own eyes the processes of free competitive trade, operating without interference from either state or producer. I was allowed to witness the broad play of competition at its fullest height, resulting in the privilege for the consumer to shop and bargain at his fancy, provided that he or she could preferably afford a four-in-hand, and did not mind adventures into trading which entailed flitting through the mire of the local common from butcher to draper, from draper to candlestick maker, to the spice man, the supplier of man's habiliments, to the carriage maker and the apothecary.
There 'mid the groans of unwilling labour recruited at some expense of human life, but with little other cost or remuneration, 1 relived during some minutes the enthralling appeal of free trade, unhampered, untrammelled and unfettered by what a sadly repentant world has come to denounce-if nowhere else at least in Canada-as the damning and soulsearing practice of resale price maintenance.
Having in a previous incarnation shown some disinclination to agree that the letters "R.P.M." must be interpreted as the mene, mene, tekel, upharsin of the consumer, my trip in the land of ministerial make-believe did me infinite good. It made me realize that even the best intentioned of us at times become forgetful of the bounties of Providence; and that, since under the leadership of this government and this party, our country has achieved an unparallelled position in the world and fob each of its citizens, it perhaps might be well to not disturb this order of things.
It has often been quoted in my own language that "Le mieux est l'ennemi du bien".
Upon my return from the gold coast and the Barbary coast, from my wanderings on the common of Boston, among the chandlers and tradespeople of New Amsterdam, and in the shadow of forts Lewis, Henry and George, it was with some degree of pleasure and with no inconsiderable feeling of pride in human achievement that my disillusioned eye roved over some of the gilded, becarpeted and luxuriously fronted emporia-even those without the further inducement of live models -which the minister of make-believe took some pains to delineate before this house yesterday.
Those of our colleagues, tradespeople, merchants, druggists, whom we had at first

accepted as sound people and men well regarded in their communities since they seemed to command the respect of the majority, which as the minister himself pointed out yesterday still rules-these colleagues, sir, upon my return regained some of their temporarily lost stature.
Clad as they had been in the land of make-believe in what to the fastidious were the somewhat repulsive and repellent tatters of Simon Legree and his French counterpart, Harpagon; twirling under the consumers' noses the implement for which the English equivalent fails me but which in French is known as "le tonneau des Danaides", behind which lurked the Medusa of resale price maintenance-they hardly qualified as representatives of the consuming public.
May I tell you, sir, that it was most gratifying upon my return to solid ground to be able to conclude that they are more than fully entitled to the original respect and tribute which has been paid each of them in his community.


An hon. Member:: The land of the stratosphere.


Roland Beaudry: Having returned from the land of make-believe may I dive headlong into the mother-sea of fact, there not to be submerged, I trust, as the McGregor fears, but to toe buoyed, I hope, upon the wave of concrete fact.
We are asked to legislate on resale price maintenance and to incorporate in our statutes an amendment to the Combines Investigation Act which will make it a criminal offence (a) to maintain or induce to maintain resale prices and (b) to refuse to supply goods as a consequence of refusal to maintain prices, each, I point out, being an offence in itself and quite independently to each other.
This measure has come as a considerable surprise in many quarters in view of recent Canadian history in the field of price investigations and in terms of the speech from the throne. In recent years we have had three definite and separate experiences of sorties into the field of prices. In 1948 the special committee on prices, consisting of members of this house, sat for almost four months. Its conclusions, after having delved deeply and at length into the question of prices and the causes for the then rise of prices, were that resale price maintenance, which might have been a small contributory factor, was certainly not such a factor as to warrant attention at any length.
If the prices committee did not at that time probe deeply into the question in spite of the length of the inquiry and in spite of

the ample time at its disposal, may I submit to you, sir, that this was done principally on the McGregor's advice on this matter.
I refer the house to page 210 of minutes of proceedings and evidence, No. 5, of the special committee on prices, Tuesday, February 17, 1948 in which, in answer to a question by the hon. member for Vancouver East (Mr. Maclnnis)-, the witness, the McGregor, stated:
. . .we had no complaints in recent months and we had made no investigations in recent months. One reason may very well be, and it is a fact, that competition is working in most of the fields which are indicated in the four or five pages to which we referred yesterday.
The hon. member for Eglinton (Mr. Fleming) interjected the following:
Items in the cost of living index.
The witness answered, "yes".
At page 213 during the same examination the witness was asked if there were any monopolies in the distributive trades or the manufacturing trades over the last ten years, and the answer, as found at page 213, was, "I do not think there have been in the distributive trades." At page 221-and I shall -come to this later because it has a very significant bearing-there is a question by the hon. member for Calgary East (Mr. Harkness) with respect to resale price maintenance. He said:
I would take it that you do not as a general rule look upon resale price maintenance as an inimical practice?
Further, and still as a question, he said:
I take it that from the fact that the situation exists you do not look on resale price maintenance as a bad practice as far as a large number of commodities are concerned. Is that correct?
The answer was:
I have taken a pretty strong attitude in this brief on the question of resale price maintenance. I realize that a case can be argued on the other side. If these issues were all capable of being referred to as black and white it would be a very much easier job of administration. Here is a case where I think you have to examine the particular commodity and the particular circumstances in every instance.
Later he said:
I would rather examine each case on its merits and then come to a conclusion.
I said there was some surprise at the terms of this legislation. May I refer hon. members to the speech from the throne in which the government suggested that it was about to introduce legislation "arising" out of the MacQuarrie report. I now submit that the bill before the house does not arise from the MacQuarrie report. It is a strict interpretation of and a rigid adherence to every single term and every single word of the conclusions of the MacQuarrie report.
Combines Investigation Act
Discussing the principle of the bill yesterday, the hon. member for Kamloops (Mr. Fulton) prefaced his remarks with the statement that he and his party took no strong attitude either for or against this measure. That, sir, was a statement which caused no great surprise on this side of the house or anywhere in the country. It is a statement which is very well in keeping with what is sometimes referred to with some levity as the Conservative philosophy.
Contrary to the hon. gentlemen I take a very strong view of this matter. I am in accord with the principle of legislation generally covered by the bill, but I am not fully in accord with its terms because the conclusions of the MacQuarrie report, now expressed in the terms of this bill, stem from premises which, in my humble opinion, have never been established.
The hon. gentlemen who were members of the special committee on combines realize that we have no evidence on the MacQuarrie investigation; but we do have evidence on one subject, namely the request made to industry when it was invited to appear before the MacQuarrie committee. I refer to page 663 et sequentia of Hansard of this year. The Minister of Justice (Mr. Garson), moving the motion to establish a joint committee to consider the interim report, quoted the letter which had been sent from Ottawa on July 7, 1950, to industry, and I quote part of this letter as follows:
To avoid any possible misunderstanding1, I desire to emphasize that no suggestions of amendments are being made to the committee for its consideration.
And further:
For its assistance in this study the committee is anxious to receive as soon as possible from organizations, firms and individuals whatever views they may wish to express upon matters within its terms of reference.
And still further:
In view of this the committee invites comments on this particular problem ... In particular, the committee would appreciate receiving extended comments on the tentative conclusion of the royal commission.
On the same page of Hansard a repetition to this effect:
The committee expresses a desire to secure as wide an expression of views as possible.
Later on, the minister went on to say at page 664:
The views that were submitted to the MacQuarrie committee were general views upon the subject of resale price maintenance.
And further: "This presentation of views", and so forth.
Now, sir, we do know that the committee had none of the evidence submitted to the MacQuarrie group before its eyes. But we

Combines Investigation Act also know this, and I bring it up in respect of the contention of the Minister of Justice, expressed many times during the committee's recent sittings but more particularly at pages 246, 252, 253 and 254 of our minutes, that the burden of proof to disprove the conclusions of the MacQuarrie committee rested on the shoulders of those who were appearing before the special house committee. I contend, sir, that a great deal rests on the interpretation of the word "views".
Following a price investigation by a special committee of this house in 1948, the conclusions of which did not in any way reach into resale price maintenance; following a royal commission subsequent to the report of this committee and extending into 1949, again with no definite conclusions as to objections to resale price maintenance; in 1950, without any action from a royal commission or a house committee; without any action for over twenty-five years by the commissioner of combines against resale price maintenance- and in spite of the fact that both the present and the former commissioners agree and admit that the present act would allow and justify prosecutions against resale price maintenance, on that very score and on that score alone-industry which had first been asked to submit to a third group, which has no judicial nor legislative capacity, its "views" on the matters, was now asked to destroy the conclusions of the MacQuarrie report.
I submit, sir, that industry, the merchant, the tradesman and the manufacturer, the butcher and the candlestick maker, must have submitted views; and my contention is supported no less by the fact that when the same people were again given the same invitation to submit their views before a committee of this house no less than a month and a half ago they again did so; but the Minister of Justice found it possible, found it necessary perhaps, in respect to his conscience or to his belief-and never would I contend that his conscience or his belief are not above reproach -and imperative, to state before the committee at every possible stage that the onus of proof to destroy the conclusions of the MacQuarrie committee was upon each and every one of the witnesses who appeared before us.
Now, sir, I have felt, and others in this house have felt, that perhaps their expressions of views should have been looked at and interpreted in the light of their general definition of life, not in the light of lawyers and legislators. Nothing perhaps substantiates this belief more than what one of the two largest labour groups in the country said at page 46 of our minutes on being asked whether they had appeared before the Mac-

Quarrie committee, and what argumentation they had submitted to that committee. They, through the voice of their public relations adviser, Dr. Forsey, stated as a preamble to their appearance before the committee, in Dr. Forsey's words:
Second, X want to make it very clear that the congress does not regard this legislation as of vast importance or likely to be of enormous effect upon the cost of living.
At one stage, sir, I waxed slightly curious and asked this question:
In so far as your report to the MacQuarrie committee is concerned, short though it may have been, was it substantially different from the brief we have before us?
The answer was:
It was very much shorter, and I think-in fact it simply contented itself with saying what our attitude was.
As I recall we did not present any argument.
Then I laboured the point slightly, and at times I was very meticulous. My question was:
Did your report to the MacQuarrie committee include any more substantial or concrete information than the brief which is before us this morning?
And the answer was:
Most decidedly not.
Yet, Mr. Speaker, I find at page 8 of the printed copy of the MacQuarrie report, under the heading "Submissions received" that, in general, retail associations, manufacturers, wholesalers and retailers were favourable to resale price maintenance, while on the contrary co-operatives, labour unions, farmers and consumer associations expressed opposition to the practice. Now, sir, I have dealt with one labour union. May I go on to a second witness from the same group of labour, the Trades and Labour Congress of Canada, who appeared before us. In the early part of their statement they said, on page 371 of the proceedings of the committee:
We would like to improve the standard of living: we are not interested in just going around seeking higher wages, and we are not sure whether amending the Combines Investigation Act would help that.
Further on they state:
We think if you set up a law of that sort in a positive sense, with a consumers' price board where these arrangements can be considered and approved in whatever form they may necessarily take, that we would be moving in a direction which would uphold the principle of free economy.
Then the hon. member for Eglinton (Mr. Fleming) tasked this question, as it appears on page 372 of the committee proceedings:
Q. Have you examined the draft bill on page 34 of the proceedings of this committee?
A. I have read the original draft.
Q. You will recall it purports to propose blanket prohibition on resale prices. Would you think that is a proper and desirable way of going about this matter that we have blanket prohibition, or if we

are going to have legislation on it should it be left to determine whether in the particular case the particular type of agreement is in the given circumstances harmful to the public interest or not?


Mr.   Bengough@: It would have to be flexible.


Donald Methuen Fleming: You would not favour a general
prohibition?


Mr.   Bengough@: No.
So the members of the committee and the members of this house are in this position today, that without having access to the evidence put before the MacQuarrie committee, this evidence being privileged, and having only the evidence submitted to the committee of this house on which to rely, we are asked to agree with conclusions reported by the MacQuarrie group, conclusions for which there is not the least vestige of a premise.
There were two groups who appeared before us, the protagonists and the antagonists. The protagonists claimed that resale price maintenance should be illegal because it deprives the consumer of his shopping rights, and it deprives the retailer of his full right to compete in prices. It is claimed that the alienation of this right is detrimental to the general interest-although no proof was submitted and proof to the contrary was admitted-in that the practice has led to higher prices.
The antagonists of this measure agree that resale price maintenance limits the consumer's bargaining power but not his right of discrimination between similar commodities. Rigidity of price has been claimed as one of the other factors in resale price maintenance. Price maintenance may be on only one, a few or many articles in a wide range. Variety, it has been contended and not disproved by the evidence in the record, assures price competition at all levels. A further contention was that prices are generally lower in the range of resale price-maintained goods, this being achieved through the phenomena of higher volume, more turnover, cheaper production cost, lesser margin and a lesser price.
Of course, sir, I was forgetting to bring into this discussion the evidence of one who has been termed by the hon. member for Coast-Capilano, and by others, as the "star witness" of the committee's investigation. This "star witness" made a series of pious statements, but he scrupulously avoided any reference to actual fact. From his slightly pursed lips cascaded an avalanche of "I believe", "I opine", "I think", "I hope", but never "I prove." I turn to page 388 of the record where the "star witness" said:
My very first major inquiry related to resale price maintenance. It was started in September, 1925...
Then he went on to describe his experience. This, sir, is in opposition to a very
Combines Investigation Act pertinent fact, because as you will see later the "star witness" for the protagonists held himself fully capable of discussing and determining the juridical portent of the bill now before us.
The "star witness", who had experience going as far back as 1925, declared in 1948- and I shall bring has evidence before this house in a moment-that after thinking over the point and discussing it with his associates during twenty-three years' experience, he was still unable to define or redefine the section of this act which would, in fairness to everyone, be the proper legislation against resale price maintenance.
At page 389 of the committee's proceedings our star witness stated:
If only a few of the manufacturers in any one field adopted the practice, and there were plenty others who did not, the damage to the consumer through such a limiting of price competition would not be devastating.
But, Mr. Speaker, nowhere in the 388 pages of evidence which precede this statement has it been proven that his contention was either true or untrue.
At page 390 the McGregor gives an "opinion", but this time he states it very clearly:
In my opinion, for the reasons I have indicated...
I should be deeply grateful, Mr. Speaker, to anyone in this house who would quote from this record what reasons have been indicated. The McGregor says:
In my opinion, for the reasons I have indicated, the combines act in its present form is not sufficient to prevent such action. The act needs amendment.
Further down on the same page he said:
The extension of the practice in recent years has been alarming. If it continues it will not be long before price control by manufacturers will become the rule in the distributive trade and price competition the exception . . .
But, gentlemen, you have all heard the pious reference, made in 1948, to the fact that over a period of years of the McGregor's experience, there was no lack of competition in the distributive trades. Now, of course, the extension of this practice "has been alarming". Indeed, so alarming has it become that later in his testimony the McGregor states that so far as he can ascertain-and again in his opinion I submit-over a period of almost thirty years, this practice, which at this stage has reached such "alarming" proportions, may have increased from 5 per cent of the volume of trade in 1925 to the alarming figure of perhaps 15 per cent in 1951. I submit to you, Mr. Speaker, that if we continue at this "alarming" rate almost three centuries would elapse before we were engulfed and thoroughly upset by this alarming phenomenon of resale price maintenance.

Combines Investigation Act
It is unfortunate, sir, that time prevents me from going through each of the opinions of our star witness, but here is one I should like to bring to your attention. It is another of the pious statements he made so frequently and with so little difficulty. Referring to the attitude of the "other fellow"-as he stated it-one wonders how many "peculiar" industries there are.
That word is in quotation marks even on the record, so there must have been a quotation either in his voice or in his script, although, Mr. Speaker, most members of this house iand all members of the committee know that it is easier for me to refer to the record than to his printed brief, because his printed brief was submitted only after he had put his contentions verbally on the record.
But please give your attention for a moment to the connotation of: One wonders how many "peculiar" industries there are in Canada; because turning back to page 597 of the record -again the McGregor being on the witness stand-he was asked in reference to one statement made by a witness in the retail drug trade, who had stated that it would be very difficult and in his own words, very rough, he being a manufacturer, if the business he had taken thirty years to build up could be left to be destroyed overnight by the decision of an independent dealer; the McGregor is being asked:
There is a case where a manufacturer says it is against his interest if retail price maintenance was not followed and he feels obviously very deeply about it. What would you say as to his argument?
Then the great, the ecstatic, the pious McGregor says:
I think this particular group is one again you would classify as one of the "peculiar" industries.
I could go on, sir, ad infinitum arid, certainly much longer than this house would condescend to listen, going through these gems and pearls that came from the "star witness". I may say that at page 400, dealing with the question of loss leadership, the star witness emitted this pearl-


An hon. Member:: Loss leadership?


An hon. Member:: That is a Liberal.


Roland Beaudry: Yes, I am a Liberal, if you are interested. He said:
The big stores seldom resort to such a practice. When they do, there may or may not be economic justification for this action.
This, Mr. Speaker, from the man who for twenty-five years fought monopoly and who at this stage was the "star witness"; and this is not my description but that of those who not only would fight monopoly but who-I prefer


to think, without perhaps deep enough thought-would cause serious permanent injury to ia great many people in Canada.
Sir, on that and on much more evidence of this type both sides, the protagonists and the antagonists, rest. Of course, there was much discussion. In cbmmittee a great deal was said and a great deal was adduced in evidence, mostly through members-more so than through witnesses-to the effect that resale price maintenance in Great Britain and in the United States was in one case perhaps bad and in one case perhaps good; but that at any rate the proposed legislation in Great Britain was of great impact and it was something upon which we in .this country could base our judgment.
Mr. Speaker, I call your attention to this fact. Yesterday, the Minister of Justice (Mr. Garson) while presenting his argument pointed out, for instance, that in Great Britain the increase in the retail drug trade had gone on at such a rapid pace that from 8,000 to 9,000 new stores a year were being opened, and that this constituted a great indictment against the practice of resale price maintenance. Let me say that we have in this country figures which do not necessitate that we should go to Great Britain. We have in this country figures which in this case were supplied to me by the counsel for our committee; and these figures indicate that the drug stores in this country which in 1930 numbered 3,267, in 1941 numbered 3,595, while evidence before us in 1951 brought up the figure to somewhere about 4,500. It would seem to indicate, sir, that perhaps we should remain in this country to discuss this argument and to get the full import of the mass of other arguments which have been brought forward.
Mr. Speaker, I feel that I have gone over my time, but if the house could be lenient with me for a short matter of minutes it would be a matter of privilege not only for me but a matter of privilege for the entire house because it would permit me, I assure the house, to avoid speaking on the amendment and being repetitious; and I must say that I dislike to be repetitious. Mr. Speaker, may I ask leave to speak for a few more minutes?


Mr. Speaker:: Has the hon. member for St James leave?


Some hon. Members:: Yes.


Stanley Howard Knowles: I do not think it would be fair. We stopped the hon. member for Coast-Capilano (Mr. Sinclair); and others since he spoke have confined themselves to forty minutes.


Mr. Speaker:: I think we gave one hon. member two minutes extra.


Stanley Howard Knowles: All right, but only two
minutes.


Mr. Speaker:: If it is the unanimous wish of the house, the hon. member may continue.


An hon. Member:: For two minutes.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


Roland Beaudry: Mr. Speaker, it is disturbing that, here also, time prevents me from bringing forward the wealth of proof which is on the record; but I commend the record to the attention of each hon. member before he formulates a definite opinion as to whether he should be for or against this legislation.
There is just this I want to say in conclusion. Many people have wondered why I am taking the attitude I am taking against this legislation. Let me say this to them. I represent in this house probably a greater number of shopkeepers and tradespeople than any other hon. member. Anyone who is familiar with St. Catherine, St. Lawrence, St. Denis, Amherst, Rachel, Mount Royal, Craig, St. James, Notre Dame and St. Paul streets in my riding will appreciate what I mean. The number and the interests of these people make it easy to understand why at times I have been perhaps too strong in upholding what I believe to be their viewpoint.
In one respect their situation is like mine. They, and I with them, may be convinced that the present bill is not a piece of legislation which will stand out among the achievements of this government. Yet they, and I with them, would hesitate to condemn the government because among its vast number of brilliant brain children it had allowed one to creep in which did not exactly scintillate.
Frankly, when I compare this bill with any of the other legislation that has been brought into the house by the government since I have been here, the bill does not gain stature. Frankly I dislike the bill. I dislike it as it is presented, although the addition of a few words would make it highly palatable. I dislike it because I fear the far-reaching effects which are not necessarily noticeable to the naked eye. In this respect I find myself in league with the small merchants of the country whose fears, well-founded or not, were clearly expressed during the sittings of the committee. Yet the addition of a few words would make it palatable. I find myself now in the position of having to determine my conduct henceforth.


Some hon. Members:: Time.


Roland Beaudry: If I may be permitted to determine my conduct, I promise to be fin-94699-139
Combines Investigation Act ished after that. Strangely enough this conduct was crystallized by me a few nights ago-


Mr. Speaker:: Order. The hon. member has spoken more than his allotted time. Shall I allow him to continue?


Some hon. Members:: No.


Some hon. Members:: Go on.


Roland Beaudry: Mr. Speaker, I have been careful in not taking up too much of the time of the house at this or any other session. I shall be most grateful for being allowed on this occasion to finish.
I was saying that, strangely enough, the course which I am now going to follow was crystallized for me a very few nights ago in the course of a conversation I had with one of our colleagues, with whom my association dates back twenty-five long years, to the days when both he and I were playing professional hockey. I refer to the hon. member for Trinity (Mr. Conacher). While he went on to scale the heights of athletic glory, as one of the greatest players on some of the greatest teams, I remained a back-bencher there, also. Yet having undergone the same tribulations in our younger days; and having served under the same men in different circumstances and at different times, and having served under other men, we like to recall those experiences.
It was precisely during one of those talks that I realized that many a time we had had disagreements of opinion with managers or coaches in particular games and concerning particular plays. Yet it never would have occurred to either of us, or to any of our teammates, to deny the coach our confidence because of some isolated instance of disapproval respecting some particular play or game. We felt at that time, and we still feel, that so long as the coach was successful in the task entrusted to him he was entitled to our loyalty and support. And over the years neither he nor I have seen anything to warrant the altering of that concept.
I have a young son who celebrated his tenth birthday last week. One of the fondest memories he will treasure is that as one of his birthday presents-


Mr. Fair:: I should like to get a word in, if I may.


Some hon. Members:: Time.


Roland Beaudry: -he had a chat with the Prime Minister of his country. To my son I shall impart this guidance, that as a member of the team he must follow the coach. And today my son's father finds himself in the position of determining for himself whether in the over-all pattern of this country's administration, an isolated event connected

Combines Investigation Act with a piece of legislation which he dislikes and fears, would justify his negation of confidence in the head of the team, or in the government as a whole.


Some hon. Members:: Time.


Roland Beaudry: What is the father's precept to the son will be the father's tenet.


Robert Fair: Mr. Speaker, I shall not take long. I do not intend to speak for fifty minutes. I am in favour of the government's legislation and, in order to get home in time for Christmas, I am leaving tonight.


Mr. W. G. Blair (Lanark):: Mr. Speaker, I feel I should say something with respect to this bill, because I was a member of the committee. It is true I became a member of it a week or ten days after it had begun its sittings. However, I was anxious to learn something about this matter because I entered the committee, as I stated in the committee itself, with an unbiased mind and without any idea of being an obstructionist so far as the legislation was concerned.
For the first few times I attended I listened with keen interest, because I wanted to find out something about the bill. It is not usual for a person to want to serve on a committee; but I went there for the purpose of learning. It is amazing to me to realize the number of people who do not know the definitions of the terms "resale price maintenance" or ."loss leader". We have heard criticism of the committee this afternoon, and I should like to add my criticism of it.
This legislation was announced in the speech from the throne. There were three evenings during the session when, for want of work to do, we adjourned at five o'clock. If this legislation had been brought in earlier in the session and a reasonable chance given to study it, then I would feel that I would know enough about it either to reject or support the bill. But at the present time I must say frankly that from the information I have received I cannot support it.
During the time we were on the committee several things happened that changed an unbiased mind into a mind that was beginning to form an opinion about this matter. The first thing that struck me was the fact that one morning some thousands of retailers, through their counsel, wanted to be heard before the committee. The ruling was: "No, we will not hear you. We have heard some other parts of your brief from some parent organization." Then I felt that when we were inquiring into something as important as this, and when thousands of retailers could

be turned away without a hearing the procedure of the committee was not democratic, and there was something wrong with it.
The next thing that bothered me a great deal was the attitude of the counsel to the committee. I have the greatest respect for the learned profession. I know they are criticized, as the members of my own profession are criticized. But while doctors develop a bedside manner, possibly lawyers develop a courtroom manner. I felt from the questioning of the counsel there one day that the witness was put in the position of a prisoner in the box who had committed a crime. In this instance the hon. member for Broadview (Mr. Hees) and the hon. member for Eglinton (Mr. Fleming) protested vigorously about the attitude of the counsel to the committee. Next day it was much better. But I could not help feeling that a witness who came in to give his best opinion, whether for or against the legislation, should not be treated in that way.
Some of these things helped me to make up my mind, so far as the legislation is concerned. In fact the attitude of the committee brought one thing to my mind, and it was this: that as applied to the retailers it might have been suitable if they had been told, "Abandon hope, all ye retailers who enter here". That is what was absolutely wrong about this committee, in addition to the fact that it was brought into being too late.
There were certain things about which I wanted to get information. I wanted to find out certain things about matters in which those people were concerned. One of the things mentioned in their brief indicated that there was in their minds some question of price fixing or combines in connection with obtaining cement, and that the western people were concerned about the trouble in getting fertilizers and the position in which the agencies were placed. I could obtain no information on those things.
The problem facing every person in this country today is the high cost of living. It has been said half a dozen times this afternoon that this legislation was brought in to try to make the people believe this government was doing something about the cost of living. They have been bitterly criticized on that account, and the reaction of the people in five by-elections shows that they are very much interested in the high cost of living.
I feel that the committee did not have the time or opportunity to make a proper study of this legislation. The matter is too big and too important. If it is going to affect the small retailer as we believe it will, we should

give further study to it and try to bring in a bill that will be the best possible for this country.
The hon. member for Broadview (Mr. Hees) referred this afternoon to the fair trade laws in the United States. Forty-five states have enacted these laws. In the United States the consumer, the retailer and the manufacturer all seem to be quite happy and satisfied. Something like that is worth studying before we hurriedly bring in a bill of this type in what I hope are the closing days of the session. It should receive more study instead of a heated debate for twenty-four hours in this chamber and then pushed through to a vote. As has been suggested this afternoon, we will be studying this matter later when we see its consequences upon the public.
I stated that very few people are really aware what resale price maintenance means. As authority for this I will take the report of the MacQuarrie committee. I find it stated in the interim report that resale price maintenance means the right of the manufacturer of a product to establish the price at which it will be sold. I think that should be placed in simple language before the people of this country. It is not an agreement between a manufacturer and his competitors to keep up prices. We should be clear on that matter. I was interested to note that in the committee certain things continually came into the discussion, rather than the broad picture of all commodities in which we would be interested. It was amazing to find that the one thing that was recurring was aspirin and the other was mixmasters. Then there was one other, the cost of dry cell batteries, and also paint brushes. I shall have something to say about aspirin and its effect on the pharmaceutical trade later on.
I come now to this matter of loss leaders. The minister sat opposite to me most of the time in the committee when we were talking about this matter of loss leaders. It is generally agreed that it is a vicious practice in merchandising. I went to the MacQuarrie committee report to obtain a definition of loss leader, and the following will be found on page 25:
The second practice, called the "loss-leader" device, is an aggressive weapon designed to attract customers for a whole range of goods by a particular part of selective and excessive price-cutting. Usually a well-known brand is used as "loss-leader" and it is sold at a price which has no direct relation to cost and may even result in a net loss.
I remember that this matter of loss leader was under discussion in the committee one day and I made the remark that it was difficult to legislate against something that was hard to define. I am not going to repeat what
Combines Investigation Act has been said since this debate started, but I should like to refer again to the MacQuarrie report which admits that price maintenance prevents two possible forms of monopolistic practice which tend to produce unreasonable retail prices; first, the use of monopoly power at the retail level and, second, the loss leader device.
We all admit, and we found out in the committee, that the loss-leader type of merchandising is a vicious practice. The minister himself admitted that in the committee; I remember that he took my word that it is difficult to legislate against something which cannot be defined. I came upon a most amazing thing on the last page of the MacQuarrie report. This type of merchandising is a vicious practice, and I quote from the MacQuarrie report as follows:
As to the "loss-leader" device, the committee believes that it is a monopolistic practice which does not promote general welfare and therefore considers that it is not compatible with the public interest.
That is true so far as it goes.
However, we do not believe that it presents any immediate danger: extreme forms of price-cutting are not very likely in this period of inflation and relative scarcity. Moreover, we are convinced that there can be found other effective and more desirable methods of controlling the "loss-leader" than minimum resale price maintenance.
This last statement is important.
Present circumstances afford time to make a careful study of such methods and the committee, therefore, does not think it imperative to make an immediate and hasty recommendation regarding that practice.
If the loss-leader device in merchandising is a vicious practice, why is something not being done about it now? If the answer is in the present legislation on combines, why has something not been done before this?
There are advantages in resale price maintenance. One has to admit that. In practising resale price maintenance the manufacturer places the small merchant in a better competitive position because the practice of resale price maintenance is against the loss-leader practice. The other people whom we must consider are the consumers. There is something to be said for resale price maintenance so far as the consumer is concerned. This creates a common price for the same article no matter where it is bought.
Another way in which resale price maintenance is valuable is that the consumer is ensured against high prices in times of scarcity. These things should be considered. We should not become prejudiced against something that will really do good in the end.
There is another matter. We have spoken a great many times about competition. I
2182	HOUSE OF
Combines Investigation Act have always been interested in name brands.
I have found it impossible to be an authority on every single commodity that I buy. I could not judge a watch, and I certainly am a poor judge of textiles. So many things enter into our life that we have come to look upon the name brand as a mark of quality.
I certainly could not look into a watch and tell that that was the best movement I could find in keeping with my purse. Therefore I depend on certain established brand names, since I look on them as a mark of quality. I have found during my life that it is better to buy something that has a brand on it because you are sure of the type of commodity that you are buying, rather than to go adventuring in certain unnamed types of merchandise. I have found it a protection in so far as I am concerned because I could not afford to buy something that was useless and would not last. I have taken a watch as a comparison, but in the whole field of watches you can start with well known brands like Waltham and Elgin and go all the way down the list until you find a name brand that will fit your purse. Behind it there is a guarantee of quality by a reputable company.
There were some other things that bothered me so far as the deliberations of the committee were concerned. I wondered with respect to the legislation now being introduced whether it would be possible to enforce something like that. Could it possibly be done by law? I came to the conclusion that it would require more men than we have in the armed forces at the present time to enforce a law of this type. I am also very much concerned about the cost of living, and I came to the conclusion that this measure will have little or no effect in so far as the cost of living is concerned. When I had the opportunity I went into many stores, and I was certainly seeking for the truth. I found that very many things sold in the stores have nothing to do with resale price maintenance.
The first person I went to was a grocer, and altogether I visited several stores. By the word "grocer" I mean people who sell food, because I include them all; and the odd butcher shop carries a line of groceries. I could only find three or four items in the whole stock carried by stores engaged in selling groceries that were price-maintained, and they were mainly luxury items. I found that cocoa and some food products such as salad dressing and cream cheese are price-maintained, and that so far as all the rest are concerned very few products are price-maintained. Food is a very important commodity at the present time. Everybody is interested in the cost of food.

Then I made further inquiries as to such commodities as sugar, flour, suits of clothes, ladies dresses and wearing apparel; and very few were price-maintained with the possible exception of men's wear. A well known brand of hat or a certain type of shoe was price-maintained. However, there is nothing which compels the buyer to resort to articles which are price-maintained. He can purchase if he so desires certain articles that are not price-maintained in every kind of commodity.
I next visited people engaged in the tobacco trade, and there one finds a certain type of individual in small stores all throughout the country. I was amazed at the number of veterans, some of whom were pensionable, who had started little stores in an effort to re-establish themselves. You would find them running a service station and selling a little tobacco. I found widows and persons who are physically unfit running little stores in outlying parts of the town. They did not carry very much stock but one of the things they carried was tobacco. Then I ascertained the number of retail tobacco people in Canada, and I found there are 90,000 outlets. This matter was not put before the joint committee and I lacked information and still do so far as the tobacco trade is concerned.
Personally I am concerned about these little people who are running stores. Then I investigated the percentage of profit made by those with little stores and I found that those retailing tobacco make a gross profit of 10-48 per cent, which in these days is not exorbitant. The public are inclined to blame the tobacconists for high prices when they are not at all to blame, and the amazing thing is the fact that 60 per cent of the price of cigarettes goes to the government.
With reference to mixmasters, I remember the day in the house when we were discussing the budget and we appealed to the government not to put a further tax on essential household articles such as electric appliances. Additional government taxation and increased sales tax brings up the price of such commodities, and the public surely should not be led to believe that the increase in the prices of these commodities is due to the fact that their resale price is maintained. The government is making a lot of money out of it. The government takes most of the money in so far as their price is concerned.
I was amazed, and in this I make no appeal for sympathy, at the number of veterans who are conducting small stores trying to eke out a living. I am interested in the person with the small store. He should have a chance to live. When I found veterans running stores trying to eke out

a living because of the size of their pensions or war veterans allowance, then I certainly felt that nothing should be done to prejudice their position. I then went to see people in the jewelry trade. I learned in the committee that practically no watches are manufactured in Canada. There is only one type of watch manufactured in this country, the Westclox, which with all due respect to the firm is a cheaper type of watch. All other watches that we have in Canada are made in Switzerland, although some of them are cased in this country.
That is one thing we found out in the committee but, as I said before, there is a measure of protection in the names of certain types of the better grades of watches. I went to a jeweler and said: "What do you think about this thing? How does it affect you?" He did not speak for a minute. He just looked at me, went to the window and took out two diamonds in cases. They were obviously engagement rings. He said: "You must remember that the small jeweler has not behind him a name like Ryrie-Birks; we have to depend on certain branded types of merchandise in order to be sure." When the average young man goes to purchase such a thing he is certainly in a jittery state and is no judge of diamonds. This jeweler showed me one name brand of diamond he sold and said, "I can guarantee this, and the customer will know what he is getting when he buys this brand." Then he showed me the other diamond that had no name and I said, "I do not know whether or not it is good". He said, "I just wanted to assure you that it is not. It is not worth half as much as the other but I can sell it for twice as much, and no young man will be aware of what is happening." Therefore so far as the jewelry trade is concerned, and I include in that silverware and certain other commodities, we come back to the point that the average buyer is no judge. One could not possibly be a judge of all commodities, and when we go to buy jewelry or anything in a jewelry store we have to depend on certain name products.
The next people concerned were the druggists. Of all retailers the druggists have certainly taken it on the jaw so far as criticism is concerned. Everybody seems to be after the druggists. I noticed that people generally seem to have adopted the attitude of the committee because when I asked certain people about the druggists-and again I honestly say I have made inquiries as to the public attitude-they always said to me, "What about aspirin?" Surely something more is sold in a drug store than aspirin. Let us go into this aspirin question, because
Combines Investigation Act I am sick and tired of people saying to me: "What about aspirin?" I am going to tell the story. Let us scotch this thing once and for all. About 40 years ago, or sometime later, when salicylic acid was discovered, one company put it out first under the trade name "aspirin", and the name was registered. But all other pharmaceutical houses sooner or later followed suit, and the peculiar thing was that they named their product "aspirin". I do not know why. They thought that the chemist who discovered it called it "aspirin" and they followed suit, and all the pharmaceutical houses throughout America, in fact, placed this product on the market under the name "aspirin". For thirty or forty years nothing was done about it; aspirin was the name. It became the name of the household commodity. The name was common, and owing to the advertising on the radio by one well-known company the name became very, very well known.
A short time ago the Bayer people clamped down and said: "This is our trade name. You cannot sell that product. If any drug store sells this product, or if any of you people or other pharmaceutical houses put it out with the name 'aspirin' on the bottle, then you are subject to a fine under the laws affecting trade marks". So all the other pharmaceutical houses had to hustle around and find new names. So they picked on the names like A.S.A., acetylsalicylic acid, cetasai, cetyloid, and all that sort of thing. But after 40 years it is pretty hard for the public to start learning these names. Therefore when you go into the drug store and ask for aspirin the druggist is legally compelled to give you Bayer's aspirin and nothing else. If any consumer knows that he can walk into a drug store and ask for acetylsalicylic acid, 5 grains or A.S.A. tablets, or cetasai, or cetyloid, or any of the names, then he can get it at about one-quarter of the price. There is no doubt about that. But that was, I was going to say, sharp practice so far as the firm was concerned. It certainly was pretty sharp business practice. I understand that the story is this. No other country in the world permits this law in regard to aspirin. The name has been accepted in Canada, and when you ask for aspirin you have to buy Bayer's. There is some reason behind that. I understand-I may be subject to correction-that when this matter came before the Supreme Court of Canada the pharmaceutical people thought there was nothing to it and they did not make an appearance and judgment was given in favour of the Bayer people.
I am very much concerned, Mr. Speaker, about the position of the druggists. As I said, they have been open to a great deal of criti-
2184	HOUSE OF
Combines Investigation Act cism, criticism in the committee and criticism in this house. The public are being taught to believe that they are people who insist on tremendously high margins of profit in connection with the manufacturing pharmaceutical people themselves. But I want you to remember this when you talk about the druggists. They occupy a dual position. They are professional people, and they are merchants. Nobody can run a drug store unless he has had four years' training. This is demanded by the laws of the province. As I said, they have a dual position. Owing to the fact that they are professional men I think that some of the criticism is entirely unjustified. It may be that there are certain commodities which do cost a great deal, but I want ypu to remember that so far as the druggists and drugstore items are concerned, the people seem to have an idea that they should buy these items at the old prices. They are not taking into consideration either high costs or rising prices, and they have never considered the question of inflation.
One might put it this way. There was a time when the public generally thought that a box of pills was worth 50 cents, no matter what it contained, and they are still looking for a 50-cent box of pills. Conditions in the drug trade have absolutely changed. As I said in the committee, there was a time when they were apothecaries, and the doctors were inclined to write prescriptions with probably ten and twelve ingredients in them. The druggists had to make all the ointments themselves. They had to roll the pills and do all that sort of stuff, but conditions are quite different now. A lot of these commodities used by doctors are put out in a bottle, possibly with the prescription on the side of the bottle, showing the potency in unit strength. When a doctor, being interested in his patient, wishes to prescribe he naturally wants to get the best product possible. I do not mind bringing Arms into this debate, because firms like Burroughs Wellcome, Parke-Davis, Eli Lilly and so forth, are people who cannot afford to put out a product which is lacking in potency or in unit strength; and doctors in prescribing sometimes specify products of a certain type of the company which will make a certain pill of a certain tincture, or a pharmaceutical.
That is very important. The public should understand that. I think it was shown in one of the briefs presented from England that there was an outgrowth of people who had sort of horned into this trade, particularly in the proprietary preparations, and in consideration of this one must remember and the public must be taught-and I find it in my own practice so often-that if you are going to get the best for a patient you must be careful what type of thing you prescribe. 

l 77'pTS!
Let us assume, as I have used the heart case before, that you have a heart case requiring tincture of digitalis. Certainly if a man appears in my office with swollen legs and is puffy on exertion, and that sort of thing, and I want to prescribe digitalis I want the best tincture that is available. It is not sufficient just to say tinctura digitalis, because these things are not measured in potency in this country. That is true. It does not seem to be a matter of protecting the doctor or the public in the matter of rating the potent strength of these commodities, the unit strength. Therefore you give them the best possible thing you can buy, and sometimes it costs more.
I listed in the committee for the purpose of explanation a preparation like vitamin B complex. You will pay what you might consider a high price for that preparation, possibly $5 for a hundred tablets made by a highly reputable firm, who place their integrity on the prescription that is on the front of the bottle. But you can buy these from certain wholesale people without any prescription on the bottle for probably a quarter of the price. These people are always very cagey; they never put the prescription or the unit strength on the bottle, but to the public it is all the one thing. They are getting the one drug. These are matters that are worthy of consideration.
I cannot see where any change in the small percentage of resale price-maintained consumer goods that are sold in drug stores is going to be a factor in the cost of living, because it has the advantage of putting a ceiling above as well as a floor beneath, particularly on commodities like drugs. It is not a factor in the cost of living when you come to a bill like this and find that the per capita expenditure in all drug stores on items that are price marked or otherwise over the year 1950 was $16.50 for each person in Canada on drugs, and that includes all the commodities in a drug store. But again I say that if you do consider some of these things as being high in price, nobody is compelled to buy resale price-maintained goods.
The main conclusion in the MacQuarrie report about resale price maintenance certainly is not true so far as I am concerned. I heard the minister talking about cough syrup, back plasters and cough lozenges, but he did not mention Lydia Pinkham. Remember that these things are not prescribed by any doctor who has a reputation he wishes to protect. A reputable doctor in good standing certainly is not going to prescribe Smith Brothers cough lozenges. I ask how you are going to control prices of the so-called proprietary medicines. Naturally I do not hold that proprietary medicines serve a

purpose; being a doctor I cannot feel that they do. But I do say that if the public want to buy them they have the right to do so. Let us take a commodity like Lydia Pinkham's vegetable compound which is marked at $2 and is price-maintained. Where are you going to arrive if you go back to find the value of the drugs in this commodity? These formulas are registered in Ottawa, and that would be easily ascertained. Again I say that I do not want to be put in the position of criticizing these goods, because when you criticize them it sometimes acts as a boost. After all, the public have the right to buy these things if they want to buy them.
1 come back again to that matter of quality brands. This afternoon several speakers mentioned this aspect of the problem. There is no occupation where quality brands are more important than that of a druggist. There are two objectives in resale price maintenance. So far as drugs are concerned, the first is the prestige of the manufacturer and the high grade article he puts out. The other objective is the protection of the druggist by assuring him a proper margin. It protects the consumer because the prices are the same in all stores. If it were not for resale price maintenance the small merchant would be at the mercy of the chain drug store.
I have aproached this matter as conscientiously as any person ever could. If this were something that would cut down the cost of living, I would be in favour of it. I have not been convinced that it is going to accomplish that object. I do not believe it is going to make any impact on the cost of living, and the Prime Minister (Mr. St. Laurent) admits that. It is going to destroy the small businesses which are so important in all the towns throughout the country. It is going to kill the small druggist who is furnishing a service in the outlying districts. The larger businesses will probably absorb some of the small merchants. The chain stores and departmental stores will have a big advantage. If resale price maintenance is wrong in so far as the drug trade is concerned, then it has been wrong for a long time. It has taken forty-one years for this to come to the surface. If it is going to be of such tremendous advantage to the public, as a member of the opposition I will say it has taken the government a long time to find out that this practice is harmful to the Canadian consumer. Do not forget that pharmacists are professional men. They should have more protection than will be afforded in the legislation we have before us. Back of that is the question of the health of the Canadian people. In the committee Mr. McGregor almost made a statement-I accused him of saying it and he said
Combines Investigation Act the words were put in his mouth-about wiping out the small, inefficient stores. We cannot afford to wipe out the small, inefficient stores.
The druggists have been forced into the position of selling other commodities. Some of them have been forced to sell sandwiches, lunches and in the outlying districts, even groceries. These stores still furnish a service to the community. I have never found a druggist who would not get up at two or three o'clock in the morning to fill a prescription. I dislike the fact that this legislation seems to be aimed at the druggists. I am tired, Mr. Speaker, of hearing people say, "Well, what about aspirin?"
(For translation of the following remarks in French, see pages 2187-8 and 2194-5.)


Mr. Wilfrid LaCroix (Quebec-Monlmor-ency):: Monsieur l'Orateur, je serai bref. Per-mettez-moi seulement de vous dire que je trouve etrange l'attitude des conservateurs en ce qui concerne le bill presentement a l'etude, et il n'est qu'un mot, a mon point de vue, qui puisse synthetiser la politique qu'ils defen-dent aujourd'hui, apres en avoir defendu une differente il y a a peine quelques semaines: "Hypocrisie".
En effet, qui de nous ne se souvient des declarations de l'honorable chef de l'Oppo-sition (M. Drew), alors qu'il accusait le tres honorable premier ministre (M. St-Laurent) d'adopter des procedes dilatoires, de man-quer de courage et de ceder devant la pres-sion qu'exergaifi la haute finance, en decidant de referer ce pro jet de loi a un comite de la Chambre. Monsieur l'Orateur, ils viennent enfin de montrer leur vrai visage de protec-teurs des gros interets et de la haute finance.
Je comprends qu'un travail de coulisse considerable s'est effectue en vue d'empe-cher l'adoption de ce bill. On pretend que le petit detaillant sera elimine des affaires; c'est la un des principaux arguments que l'on invoque. Des incidents amusants se sont produits a ce sujet. Un petit marchand a ecrit a son depute pour lui demander de le proteger et, histoire de donner plus de saveur a son argumentation, il lui faisait parvenir, en meme temps, une lettre du manufacturier, dans laquelle il demandait a son client d'ecri-re a son depute, suivant ses indications.
Au contraire, je pretends qu'un petit marchand, dont les frais d'administration sont peu Sieves, pourra plus facilement faire concurrence a qui que ce soit.
D'ailleurs, si un grand magasin a succur-sales tentait de vendre certains articles a perte ou suivant des procedes peu recom-
2186	HOUSE OF
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mandables, on n'aurait qu'a appliquer avec rigueur l'article 498A du Code criminel, lequel prevoit ces cas.
On pretend que la nouvelle legislation n'est pas necessaire. Alors pourquoi le rapport MacQuarrie, et que dire de l'opinion d'un economiste aussi eminent que le principal de l'universite Queen's et pourquoi aussi l'en-quete Stevens? Tous se souviennent que M. Stevens a ete mis a la porte du cabinet Bennett parce qu'il insistait pour qu'on suive la meme politique a l'egard de ces grands monopolisateurs des prix et du cout de la vie.
De plus, pourquoi les manufacturiers et les distributeurs, qui s'opposent avec tant d'energie a la regie des prix, en general, auraient-ils le privilege d'exercer une mai-trise speciale, a leur profit, et seraient-ils meme autorises a punir les refractaires, qui vendent a un prix inferieur a celui qui leur est indique par le manufacturier, en refu-sant de leur vendre toute marchandise?
Void d'ailleurs ce qu'on lisait a ce sujet dans le journal VEvenement de Quebec, lundi le 10 decembre 1951:
Fidele d l'engagement qu'il avait pris, de suivre Favis d'une commission parlementaire sur la fixation des prix par les manufacturiers ou les grossis-tes, le gouvernement propose une loi pour interdire ce eontrole non officiel. C'est un pas dans la bonne voie. L'opposition annonee qu'elle com-battra cette mesure. Ainsi done, apres tant de discours de son chef en faveur d'une regie des prix et de la distribution equitable des vivres, le partie conservateur ne veut plus que l'autorite intervienne dans les affaires. C'est une contradiction a noter. Dans cette fausse position, les partisans du colonel Drew posent en champions de la liberte du commerce. Mais la liberte du commerce consiste, semble-t-il, a laisser aux mar-chands detaillants le soin de vendre leurs merchandises a leur convenance. L'opposition ne l'entend pas de cette fagon. Elle perd done le credit de ses campagnes oratoires en faveur de la fixation des prix par le gouvernement. En effet, si le gouvernement decide enfin de proteger le consommateur par intervention legislative, sa loi de eontrole s'appliquera a tous les producteurs de l'industrie ou de l'agriculture. Selon toute apparence, Fopposition approuverait alors le principe de cette mesure, a condition qu'elle ne s'ap-pliquSt point a la fixation des prix par les manufacturiers ou les grossistes. Quelle belle occasion pour le gouvernement de confondre ses adversaires, en donnant satisfaction au peuple qui compte sur lui pour obtenir protection contre tous les profi-teurs. Pourquoi remettre d plus tard une action aussi necessaire au bien-etre des classes labo-rieuses!
Trois enquetes ont demontre que le public etait exploite honteusement par le privilege qu'avaient les grands manufacturiers de fixer le prix de vente au detail de leurs merchandises; et malgre cela, les conservateurs trouvent moyen de se faire les defenseurs de ces ex-ploiteurs de la grande masse des consomma-teurs canadiens.


George Alexander Drew: Mr. Speaker, in view of the
rule you have followed on different occasions, I should like to ask whether the speech which is being read by the hon. member was prepared for the hon. member for Leeds (Mr. Fulford).


Mr. Fulford:: What would I have to do
with it?


Wilfrid Lacroix: I myself do not even know the hon. member for Leeds.


Stanley Howard Knowles: Pink pills.


Wilfrid Lacroix: Besides, if a	large	chainstore were to attempt to use certain articles as loss leaders	or to follow	certain	discriminatory practices, the only thing to do would be rigidly to enforce section 498A of the Criminal Code,	which provides for	such
cases. Mr. Speaker, may I tell the leader of the opposition that I, like him, do not need anybody to prepare my speech.


George Alexander Drew: The hon. member might deliver it without reading it.
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An hon. Member:: In both languages?


Wilfrid Lacroix: It is claimed that the new legislation is not necessary. What is the meaning, then, of the MacQuarrie report and of the opinion given by so eminent an economist as the principal of Queen's university; and also why the investigation by Stevens who was dismissed from the Bennett cabinet because he insisted on the pursuance of the same policy for these great monopolists of prices? In addition, why should those manufacturers and distributors who so strongly object to price control have the privilege of operating their own private system of controls, and even be authorized to punish, by refusing to sell them any goods, rebel merchants who sell at a price lower than that fixed by the manufacturer?


George Alexander Drew: Ten o'clock.


Wilfrid Lacroix: As a matter of fact, this is what the Quebec newspaper L'Evenement had to say about the matter in its issue of Monday, December 10, 1951:
In keeping with its undertaking to follow the recommendations of a parliamentary committee on price maintenance by manufacturers or wholesalers, the government is introducing a bill to outlaw this unofficial control. It is a step in the right direction. The opposition makes known its resolve to oppose that measure. Thus, after so many speeches from its leader on behalf of price control and a fair distribution of provisions, the Conservative party no longer wants the authorities to interfere with business. It is a contradiction to be noted. By taking this false stand, the supporters of Colonel Drew set themselves up as champions of the freedom of trade. But the freedom of trade apparently consists in letting retailers sell their goods as they please. The opposition does not see ft that way. It therefore loses its credit for its oratorial campaigns on behalf of government price control. As a matter of fact, if the government finally decides to protect the consumer through legislation, its control legislation will apply to all industrial or agricultural producers. It would seem that the opposition would then approve the principle of this measure provided it did not apply to price maintenance by manufacturers and wholesalers. What a wonderful opportunity for the government to confound its opponents by satisfying the wish of the people who rely on it for protection against all profiteers. Why postpone a step so necessary to the welfare of the working class?
Three inquiries have shown that the public were being shamefully exploited by reason of the large manufacturers' privilege of resale price maintenance. Yet the Conservative party has managed to stand for those exploiters of the great bulk of Canadian consumers. Mr. Speaker, may I say to their faces in this house that they are humbugs-


Some hon. Members:: Order.


Wilfrid Lacroix: Humbugs!


Mr. Speaker:: Order: It is ten o'clock.

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Wilfrid Lacroix: Let me finish. I can do so in two minutes.


Some hon. Members:: No.


Wilfrid Lacroix: -humbugs, when they introduce motions in this house protesting against the rising-


Some hon. Members:: Order.


Mr. Speaker:: Order. It is ten o'clock; and unless there is unanimous consent-


Arza Clair Casselman: The word "humbug" is not parliamentary.


Mr. Speaker:: I do not think the hon. member applied the word "humbug" to any member in the house.


Arza Clair Casselman: Yes, he did.


Wilfrid Lacroix: I only applied it to their policy-humbug.


Some hon. Members:: Order.


Mr. Speaker:: Order. As it is ten o'clock, without unanimous consent I cannot allow the hon. member to continue.


Arza Clair Casselman: No.


Mr. Speaker:: Order.


Jean-François Pouliot: Move the adjournment of the debate.
On motion of Mr. LaCroix the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow we will continue consideration of this Bill No. 36; then the resolution of the Secretary of State for External Affairs to approve the accession of Greece and Turkey to the North Atlantic Treaty Organization. Then if possible we will proceed with all the remaining items on the order paper, but I am not in a position to say in which order.


Agar Rodney Adamson: Is there any new legislation?


Alphonse Fournier: Not that I know of.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to the order of the house passed on November 2, 1951.
[Stage Direction]
Wednesday, December 19, 1951